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tv   U.S. House of Representatives  CSPAN  February 6, 2012 12:00pm-5:00pm EST

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and the c-span video library. the u.s. is about to start their week. it will be general speeches this morning and a legislative business will get under way at 4:00 p.m. eastern. members will vote at about 6:30 p.m. today, a bill creating a commission to find federal non- military properties that can be sold for proceeds or redeveloped to cut costs. again, live house coverage now on c- span. the speaker pro tempore: the house will be in order. the chair lays before the house a communication from the speaker. the clerk: the speaker's rooms, washington, d.c. february 6, 2012. i hereby appoint the honorable
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jeff denham to act as speaker pro tempore on this day. signed, john a. boehner, speaker of the house of representatives. the speaker pro tempore: the chair will receive a message. the messenger: mr. speaker, a message from the president. united states. the secretary: mr. speaker. the speaker pro tempore: mr. secretary. the secretary: i am directed by the president of the united states to deliver to the house of representatives a message in writing. the speaker pro tempore: pursuant to the order of the house of january 17, 2012, the chair will now recognize members from lists submitted by the majority and minority leaders for morning hour debate. the chair will alternate recognition between the parties with each party limited to one hour and each member other than the majority and minority leaders and minority whip limited to five minutes each. but in no event shall debate continue beyond 1:50 p.m. the chair recognizes the gentlewoman from california, mrs. capps, for five minutes.
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the gentlewoman from california, mrs. capps, is recognized. mrs. capps: thank you, mr. speaker.
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mr. speaker, there's an old saying that goes, when all you have is a hammer, every problem looks like a nail. these days it seems the republican toolbox is down to just one tool because for all the energy choices available to america, every republican energy plan centers on one thing, drilling for more oil. first it was simply drill here, drill now. well, we are. there is more drilling taking place in the u.s. lands and waters now than during the bush administration. indeed, last year we relied less on foreign oil than any of the past 16 years. and clean, renewable energy usage is at an all-time high as well. but then it was drill for energy independence. sounds great, but unfortunately we can't simply drill our way to energy independence. even with all the expanded drilling we are doing, the plain
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fact is that we use too much oil and have too many -- too few domestic reserves. next it was drilling will create jobs and put everyone back to work. that plan was based onboarderline fictional numbers in a report bought and paid for, surprise, by the oil industry. now house republicans have found a new problem that can only be solved by opening more of the country to risky and reckless drilling. filling the funding gap in the highway trust fund. their latest proposal would combine three bills to open more of america's most sensitive lands and waters to drilling. supposedly this is how we are going to fund repairs to america's crumbling bridges and highways. it shouldn't come to a surprise that the numbers don't add up. comprow opponents of this approach now claim that we can make up the $6 billion a year shortfall in the highway trust fund by mandating oil drilling just about everywhere.
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yet according to the nonpartisan congressional budget office, drilling for oil and fast in protected coastal waters as they wish would produce at best would produce only about 80 million barrels per year, about $80 million per year of assets. that's a small fraction of the funds needed to repair and upgrade america's roads and bridges. they also want to open up a pristine coastal plain of alaska's arctic wildlife refuge, a special place i visited, and speed up development of oil shale across the west. any potential revenues from this drilling, however, will not come close to meeting the needs of highway trust fund, either. and whatever minimal funds do materialize would not be available for several years. maybe a decade. in other words, it's too little and it's too late. mr. speaker, the only way to make progress in solving our current fiscal mess is not to create a new round of give aways in favor of the oil industry, it
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would be better to start cutting some of the unnecessary tax breaks that the oil and gas industry now receives and use that money to pay for the transportation bill. that's because they are unnecessary. of the world's 12 most profitable corporations last year, fully half were oil companies. repealing these tax breaks would save more than $40 billion over 10 years. which would alone cover almost all the gap in the highway trust fund revenues. americans already are squeezed at the pump. there is no reason why they should be handing over tax dollars to these wildly profitable companies. mr. speaker, the deep water horizon oil spill was the worst in history. grippling the gulf coast economy, destroying livelihoods of fishermen and tour operators, and killing wildlife for hundreds of miles. it is eerily similar to the did he struckive oil spill in 1969. and that's when beaches were
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smother with oil, that killed thousands of birds, fish, and sea lions. now house republicans want to expose more of our coastal communities, including santa barbara, to the tender mercies of the oil and gas industry. they want to mandate new drilling off central coast beaches despite our community's long held view that the current drilling should be ended not extended. they want to gut the environmental laws of our state and our -- that our community has used to protect its coastline from the kinds of devastation the 1969 oil spill brought to santa barbara. this might be good news nor oil companies, but it's bad news for my constituents and it's bad energy policy. perhaps most ominously, mr. speaker, this proposal is bad news for the prospective new transportation bill. these new oil drilling provisions are poison bills and
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could doom passage of this desperately needed job legislation. this is very reminiscent of the manufactured crises we saw last year to keep the government funded, pay or debts, and continue the payroll tax. we all saw the chaos and gridlock those fights produced. we need to put aside this effort and use the transportation bill as a means to push forward favored policies for an already tampered industry. i yield back. the speaker pro tempore: the gentlelady's time has expired. pursuant to clause 12-a of rule 1, the chair declares the house
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>> later in the week, a bill making it illegal for members of congress or their staff to trade stocks with inside information. watch live coverage of the house when they gavel in at 2:00 p.m. eastern on c-span bid coming up shortly, we will bring you live coverage of the panel on the global economic outlook. we will have it when it starts at 12:15 eastern trip back to that discussion on the manufacturing on today's "washington journal." esota. lyle, independent. caller: thank you for taking my call. i think the best example of what happened to american industry is if you study the boeing aircraft situationnd the
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fiasco in trying to manufacture the 787 dream lineup, which they outsourced 7% -- 70% of work on the aircraft. the real crime is the person who has gotten so many accolades for ford, when he was ceo, he gave away the composite technology that the rest of the world had not -- either stolen or had been given and japan got the majority of that. they were supposed to produce 35% of the aircraft. the first wing they build was faulty. the fuselage section, what they sent to the united states, over half of the fasteners wer temporary and boeing had to tear them all down and rebuilding th. not only that, the japanese had
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been farming out the composite work to china and about three years ago china announced in the composite manufacturing magazine that by 2020 they would be building composite jetliners of 190 passenger capacity or larger for the world. mullaly signed the death warrant for our aircraft industry an you can witness all of this. cnbc has a special one-hour program, i think they ever did three-time is, and if you are computer savvy you could probably go on line and bring it up either through cnbc or through boeing 787 dream liner, and it is just enough to make you cry. host: let us hear from your guest. guest: lylhas some good
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points. one is on it is one of the reasons why companies have looked at in sourcing, which is bringing production closer to home, notwithstanding your criticism of the gentleman, but ford has announced it is bringing pruction of the four diffusion from mexico to the united states. that's an example of insourcing. president had an event recently to highlight companies that have been doing this in the united states. regarding technology transfer, your comment was true. you see multinational companies like boeing and general electric willingness to give away some of this technology to get potential market share and in larger markets like china. the challenge with that is ultimately if that means
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production jobs overseas and innovation jobs will go overseas and we will be competing against that technology that we have been transferring to japan or china. companies that stand up to would find themselves locked out of the market. one example, general motors refused to make its chevy volt battery in china. and so, the chinese authorities excluded the chevrolet volt for a list of cars that was eligible for a tax credit consumers could get if they bought the vehicle. that penalized general motors. china is not supposed to do this. we are supposed to stand up to china, but the fact of the matter is of many companies the problems are too great.
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host: our guest is the founder of the alliance for american manufauring, launched in april of 2007. our guest has been a lobbyist for the industrial union council, a lobbyist for the afl- cio, and served on several staffs over the years. scott paul continues to take calls after this clip featuring mitt romney. he will talk about china. let's hear what the candidate says. >> i must admit i took some pleasure in the fact he's talking about cracking down on time that even as he has not done so. he has had occasion to label time as a currency manipulator, which will allow him to apply tariffs to chinese products where they have manipulated currencies. still american jobs or back into our computers or stolen our intellectual property, patents, designs. even as he talked about cracking
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down on china, he has left the door wide open for them to what across our count and steal our jobs and kill our businesses. host: what does cracking down on china mean to you and what is realistic in washington? guest: it's a good question. many people complain about china's unfair trade practices. when it comes to gting them to stop, that is where the rubber meets the road. mitt romney on this is right. we have not been nearly tough enough in dealing with china on currency. a 30-second primer for your viewers, currency manipulation is where one country intervenes in a way to reduce the value of its currency in order to gain market share or some sort of unfair advantage. it is a free-market that determines the level of the exchange rate in china, then it would be much tighter. it would be 25% or 40% higher
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than it now. that serves as a defect of export subsidy costs for products coming from china to the u.s.. it serves as a tax on our goods going to china. it makes them far less competitive. mitt romney is right to complain. the president has had six opportunities to name china as a currency manipulator, which would trigger negotiations aimed at ending the practice. the president has refused to do that. the senate has passed a bill in zero bombing bipartisan margin, one of the few times democrats and republicans came together last year to pass something. it would happen in the house of representatives that speaker, john boehner would let the bill, up. what it would mean practically its china wod face >> see the rest of this conversation online at c- span.org. we are going to come position on the global economic outlook for the year.
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this is hosted by the carnegie endowment for international peace. >> it will be my pleasure today to moderate the discussion. over the course of the discussion, what i hope i will be able to cover is what is happening in the eurozone, what is happening in the united states, and of course, what is happening in the emerging markets, particularly china, the world's second-largest economy and now its largest exporter and manufacturer. to make sense of all of these -- what is happening in all of these regions, we have a tremendous panel. to my left, olivier blanchard, economic counsellor and director of research at the imf. to my right, our resident fellow at the american enterprise institute.
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to my extreme left, uri dadush of the carnegie endowment, a senior associate and director of the international economics group. you,on't we begin with olivier? perhaps you can give a 10-minute overview of the global economy and take it from there. >> thank you. good morning, or good afternoon let me try to give you a sense of how i see the world at this juncture. clearly, there has been a number of good news in the recent past, from the effects of the ec be, the indices of manufacturing, the unemployment
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rate, increasing employment in the u.s. many people have gone from being optimistic in the space of a few weeks. we had one of these stages where we had to assess what is noise and what is news. it is always a difficult thing to do. we have a tendency to want to believe in good news and think that somehow things are fine. i thought what i would do would be to take a step back and theribe how ic see revolutions, then we can look at recent events. the story will be largely store of advanced countries. i see three main breaks, which are going to be at some level,
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different levels across different countries for quite awhile for many years to come. the first one was saving and deleveraging for households. that is not true in all countries, but it is true in many countries where the savings rate has considerably declined, and in the case of the united states, it is clear that it was too low and consumers have to adjust and have to have higher savings. the savings rate has increased back but the result of this is if you think about where it is going to come from, consumers are going to supply a smaller proportion and something else has to take it back. what that something else is or
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will be is not entirely clear. there was hope that it would be exports, but it is is not happening. if you want to go back to the same output trend, what i you going to replace -- what are you going to replace? that will be an issue in the u.s. for a long time. it is in other countries as well. the u.s. is the best example. the second factor, which is also slowing the recovery, is consolidation. the news in terms of the fiscal consolidation is very good in the sense that nearly all of the countries, with the exception of japan, for a very good reasons, because of the earthquake, has seen fiscal consolidation, and there is more fiscal consolidation, and, roughly on the order of 1% across countries, which is quite substantial.
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that is clearly at needed, but in the short run, there is no ambiguity about the fact that this is not good for growth. it notion that fiscal consolidation could be expansionary from the start -- if it ever had any credence, it has been proven wrong time and time again, country after country. this is a second factor that is not mine to go away. the third one is deleveraging in the financial system, and the degree to which it is going to lead to a credit crunch. the two are not quite the same. selling assets to other banks, to reorganize the business model. will we worry about from a macro
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point of view is the degree to which it needs to a credit crunch. the evidence is not as clear as i would like. i am uncertain about the degree to which it is happening or will happen. it does not seem to be happening on a major scale in the u.s. banks have indicated that they were listening tightening standards. in the recent past, they have stabilized. with a few exceptions, i don't think it is a major issue in the u.s. at this point. some small and medium prices are very much out of the market. it is getting worse. the big question is in europe, the requirement to have much higher capital ratios as well as other factors which lead banks to deleverage by reducing assets, rather than increasing
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their capital. that would take the form of a major credit crunch. the evidence is that in the last three months, credit to households decreased considerably. some would say well, that is evidence of a credit crunch. at the same time, activity in representative -- activity in europe has weakened and it was negative growth in the fourth quarter of 2011. between the credit crunch, the fact that output is low, and people don't want to go with credit demand, you can go a bit further. you can ask banks might credit is lower -- why credit is lower. we have from a bank lending services that they at the last one coming up last week.
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banks indicate that there had been tightening of lending standards. one more step is needed, which is why is it that they did it. one could be that they don't have the capital, one could be they don't have liquidity, and one could be that they just want to make loans. -- just don't want to make loans. the man answers were liquidity and expectations of bad things in the future. tightened credit. these are the two main reasons from the central bank's, will make a difference. the takes a while for these things to work. if it is capital, your stock. but if it is expectations of the future, these can turn on a
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dime. optimistic expectations lead banks to be more willing to bet. mechanical constraints -- the short of it is deleveraging has made the news. at this stage, it is important for europe, i think uncertain. these are the three factors. all the results of legacies of our crisis, all desirable in some way, which is that you what households to save enough, you want the budget to get back in shape, you want banks to become smaller, more focused. in the short run, it leads to lower demand for goods and less growth. it is not happening because --
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all of these things in another environment would be desirable. as long as -- [unintelligible] all these things are going to have an effect on growth. these are the three breaks. if you go around the world, in advanced countries, i would say, what you see that in some form in all countries, in the u.s. or elsewhere, but in other places -- in europe, you have them in acute form. when they are present in acute feedback loops become deadly. banks are in trouble because
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credit goes down. that is the scenario we see being played in a number of european countries. this is what leads us to think that growth in numbers for some of these countries would be negative. let me turn to the next set of questions, which is that clearly the center of the problem is in europe. each year you have to get the question of the two conditions, which is that if things remain the way they are, there is another question, which is good things get much worse. then we talk about the ones that exist in this modeling-3 scenario -- thiws muddling-
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through scenario. let me start with the u.s. i may disagree with some -- i think that the european crisis is having an effect on the u.s. and allied you surely have european banks decreasing operations in the u.s. you have some spreads which are higher as a result of the european crisis in the u.s. but you have the safe haven effect, which is that when things are bad around the world, not money tends to come back to the u.s. and if you go -- you might argue that the uncertainty in europe has decreased the long rate in the u.s. by up to 1% it is true that there are
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factors upsetting and some have gone up. for the moment, it is not clear to me that the effect of the european crisis in the u.s. is that major. if things were worse, we would be in a different situation. on the effects of europe in emerging-markets, you cannot put all of them in the same basket. you have to be careful there is a set of emerging-market countries that escalate -- that are clearly suffering. central europe, eastern europe, they are affected by trade, because they are very much connected to the euro, and affected financially because when they went to deleverage, they look for the easiest place to do it, which is next door.
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the countries are clearly suffering from that. if you leave imaging market europe -- believe emerging- market europe, the effects are more complex. on the financial side, it is not completely obvious, because you have this interesting tension between two factors. the first is a risk appetite, which tends to make -- with a decrease in risk appetite, money flows out of our emerging market countries. that is the natural tendency at the same time, you have the rate of attractiveness of emerging- market countries relative to europe or even if the u.s. if you go to chilly and you buy bonds, you will get 50%.
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i would guess that you are more likely to see an appreciation. you have these two factors, and depending on which one wins, capital flows in or out. my best guess is that it will mostly flow in for the time being. this is in the muddle-throug h scenario. the worst one is more complex. with inflows in the emerging- market bonds for equity funds, they are running at a very high rate. last month was the highest in many years. iton't think we can count on as continuing forever. the problems of emerging market countries is going to be hard to handle in the same way as they did in 2009 and 2010. let me come to the bottom line. i probably have used my 10
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minutes. forecasts. the question is, when you do a forecast, what function does it make on policy? our forecasts of the weeks back was based on the slow resolution urothe year -- the eru crisis. things would be done, but not as fast as some would dream or somewhat fear. -- or some would fear. based on this, we had recession in europe in 2012. small. as things go up, they are imprecise, but -0.5%. that is where the news of the last few weeks, the
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introduction -- some news on pmi's would lead me to not be terribly surprised if we had fact a weak recovery, something on the positive side not very far from zero, but positive. there was almost surely negative growth in the last quarter of last year. technically, it would just take another quarter to have recession. but it is going to be closed. in the u.s., 1.8% for 2012. again, in light of various news, i would be willing to go a bit higher. now, that is good news, but one should remember that at is not good enough in the sense that, for example, if you wanted the
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unemployment rate to be down to 6% in two years, you want 4.5% growth. it is better than "could've been," but it's not great. in an emerging markets, a slight decrease in the growth rates relative to 2011 partly because of lower trade, partly because of general reasons, idiosyncratic in india and brazil. slightly lower growth in china, but we did not predict a hard landing at all. our numbers are very high, but just a bit lower than last year. the last point is, well, what is and thaan event?
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i don't be too specific about what the event might be, but you can think up some. we would see a fairly large increase in uncertainty. assessing balance sheets would be difficult for values players. we would definitely increase uncertainty, and possibly lead to very large spreads on a number of bonds. it is ferry important that we have the means to maintain a low interest rates. that is where the fire wall discussion comes in. where the fire walls are being placed -- we may come back to it. we are not quite there yet. if firewalls are not there, you can think of worse scenarios. but i put blow probability on that one. let me stop there.
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>> thank you very much. let me ask a quick follow-up question. where do but the probability of the muddling-through scenario for europe? >> i will not answer that question. [laughter] i am an optimist. it seems that avoiding catastrophe is well within reach. i'm quite impressed with the progress of the very recent past. so i'm very healthopeful. >> do you see yourself in the optimistic or pessimistic category? >> i don't like to the issues in terms of optimism or pet dismiss pessimism. i prefer to look at realism or fantasy. when i look at europe, i see how i don'tgoing to play a-- see how you muddle through.
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basic much buy olivier's framework of looking at the idea that what you have is consumers who are over leverage, you have deleveraging going on, you have fiscal adjustments, you have to of fiscal consolidation, you have the credit crunch. but it is important to look at this in quantitative terms, and what particularly others may is that pat -- what particularly it bothers me is the path that europeans have set themselves on to latest fiscal compact. what they are talking about its fiscal consolidation to a major degree, and countries on the periphery not just in 2012, but in 2013 as well. you look at a country like spain, you are talking about three points of the fiscal
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adjustment a year in an number of countries. it is true of spain, portugal. greece, forget about that. total wide off. my view is that if you have got that kind of fiscal consolidation on that scale at a time you have economic weakness, a bad external environment, germany and france slowing down a lot, and you have signs of a credit crunch, i don't see how you have signs of growth slowing in lot, and then what we had been seeing in greece. and you tighten the budget again and you slow even further, and what this is going to do is it is going to decrease the size of a hole in the banks' balance sheets that the capital adequacy is going to occur. you are going to get credit tightening as well.
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i just don't see how this plays out favorably. you can kick the can forward and do this operation a couple of times to mask the problems. the market will rally for a while. but as you see the growth in numbers this of wine and as you see the budget targets being messed, you are going to see a reassessment of risk. the reason i have the conviction of this year is we have not been talking about this occurring in one or two countries. we talk about this occurring in the whole of the periphery, in italy as well. i think europe is really going to be pretty much with us. you are going to see real disappointments at there. and i would agree with olivier , you have the links through the trade side, you have
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links to the financial markets side. what will occur is that the risk aversion comes back and american banks get impacted. europe might be in decline, but still accounts for 1/3 of the global economy. its banking system is huge. in short, i am not an optimist. >> where do you come out? >> i am not quite as realistic as desmond, but i don't fantasize to the same degree as the german finance ministry does, for example. i am very concerned, of course, about the situation in europe. if i was to point to the single data element that worries me the most, it is the fact that four
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of the five countries in the deeper struggle, italy, spain, greece, and portugal continue to have a very large current account deficit in the middle of a projected recession and, in the case of greece, an absolutely disastrous wanone. they have large current-account deficits. that is a worry, because it points to a fundamental issue of lack of competitiveness of these economies. it is a much less tractable, goes deeper and is less tractable, than the fiscal
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situation. of course, the fiscal situation is very worrisome in and of itself. but if you are trying to deal with the fiscal problems against the background of a very seriously misaligned real exchange rate, and furthermore, against the background of such profound uncertainty about the future, including the possibility that the euro might unravel, the possibility that you get what in the world bank we used to call a supply response, that will, as olivier was explaining so clearly, will be needed to compensate for the massive deleveraging occurring across the board. the probability of that in several of these countries is
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very low. i am at less worried about greece and portugal, because greece and portugal, one way or another, can be managed. ireland is a question mark. they are relatively small. in the case of greece, when you convince your private sector members to take a 70% haircut, that is the worst are cut anyone has ever taken, with the possible exception of argentina. i am at less worried about them in the sense that the market has already heavily discounted and they are relatively small. at some point the public sector is going to have to join the private sector in forgiving some of these debts. to me, the heart of the question is italy and spain. in terms of the viability of the
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euro and the likelihood of the worst-case scenario that we have been alluding to. i don't know the answer. it is an open question in my hether italy and spain can achieve the beginning of competitiveness that is needed. and at the same time do the fiscal adjustment. if they cannot, i don't think there is a way that the euro can be saved. i just don't see it, because whereas with portugal and greece, you can say it is political will issue, it is relatively small amounts of money, in the case of italy and spain it is and economic
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problem on the first order of magnitude, and not even the institution presented by olivier here has the firepower, nor does dhhs have the firepower could those of us to believe that the dutch and germans will allow the eight european central bank to just print money to buy these bonds -- you know, i am not saying it is impossible. i am just saying it is unlikely. you want to watch if italy and spain are reestablishing conditions for growth. that is the only way that growth is going to come. uri touched upon a key point.
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what reforms are being contemplated that would lead to improve the competitiveness and reduce the overhang of entitlement that is going to make the current account deficits contract? >> i think you are right. they hae be -- have been too much focus, especially the european union, on the physical aspect. there are dramatic differences between these countries, and one has to be careful to put greece on one side and the others on the other. it is it true that these countries to some degree -- the fiscal on the competitiveness part -- it is important to
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remember, actually, that some of the countries which are in trouble now had a responsible fiscal policy. this was the case with spain. the fiscal pact would not have made much difference to the way to spain behave. that is the big issue. there is no question -- let's go to the case of greece, by far the most extreme. what does greece need to get back to health? it needs a dramatic decrease in debt. that is a subject of negotiations. with respect to private creditors, it looks like they are cut would be very large. -- like the haircut will be very
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large. but that is only half of what it needs, and it may be the easy half. there is no secret here -- either you basically increase productivity in lot and quickly and you keep wage growth moderate, or you decrease wages. there is basically no way around that. what should they do? they clearly should do both, but we have to think about the fact that structural reforms, which have potential in greece. one sees all kinds of places where productivity could be increased and take a while to take hold. therefore, a country like greece has to do something as well. without these two, the decrease in debt and a decrease in labor costs, it it is very difficult to see how they get back to health.
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in addition, under the most not necessarily optimistic but realistic scenarios, this is going to take a very long time. what this implies is that for a long time, greece will not be able to go back on the market, and therefore, the third leg is finding it might the official creditors -- is funding by the official creditors for as long as it takes, which might be quite long. the only way for greece to get out eventually is reduction in debt, progress on wages, labor costs, and the commitment by the europeans for as long as it is needed. under these three conditions, it is still an unpleasant task, but at least it is want that can be tried -- one that can be tried.
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this is a way to think about things. that is what we want to try to help come to. the problem is very -- in the other countries as well. it is nowhere as bad as in greece. one has to distinguish that the problem in italy is not the external problem. it is quite small. italy is in a different situation from greece in the sense that italy is not doing great, because the high debt-to- gdp ratio, low growth rate, what it has more or less been like this for a long time. the crisis make things a bit worse, so they had to do something on fiscal. what they have to do on fiscal is not in the same ballpark as what the other countries can do. i am fairly optimistic they will be able to do the adjustments. i wanted to go back to the point that desmond made because i
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strongly believe that fiscal consolidation is needed, no question. you cannot just let the debt-to- gdp ratios to increase forever. but you can choose the speed. i have used the expression that fiscal adjustment is a marathon rather than a sprint. i did not free expression. i took it from angela merkel --. -- i did not create the expression. i took it from angela merkel. over many years, credible, coherent for many years is a bit buttressed to the strategy. some countries don't feel they have much margin to play with. some coaches probably -- it but some countries probably have it and they should use it. >> he talked about the circle between fiscal consolidation,
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growth, credit contraction, and you were being realistic. what advice would you offer that is different to what is being offered to the european governments today by the imf and other advisers? >> that is a difficult question to answer because i don't think there is uniform advice you can get. if you advise the greeks or the portuguese are the irish, i would advise them to get out of the row -- out of the euro. it is subject to domestic law and makes it easy to write it down. i just don't believe that this approach of mass of the fiscal adjustment over several years -- massive fiscal adjustment over several years is going to lead anywhere. i want to say something about structural reform, because this is being bandied about as if it
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is some sort of alternative or solution to the problem. i agree that structural reform is one of four from a -- one point of view. it puts countries on a different growth-path. but in the short run, if the problem is that we are facing an adequate demand -- facing in adequate demand, to cut wages drastically as it is is being proposed in portugal right now, i am not sure how that creates demand. what i see is that that is going to be another factor that deepened the recession and then compounds the problem of the fiscal side. i don't know if there is a way out of the box. you cannot get out of this box without writing down the debt. my view is that without getting if you areeruro -- looking from the point of view of france and germany, i think that is absurd what they are
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doing. you want to give some logical coherence to this approach. what you expect is that if you are asking countries on the periphery to tighten the budget and go for a consolidation, what you would think is that the countries that have the surplus would be moving in the other direction to make room for this to occur. with all of them doing it at the same time, that is going to lead to disaster. what i would be telling ms. merkel is that she really needs to get away from this notion that fiscal consolidation is a great thing under all circumstances for all countries, and do it at the same time, and you have to loosen up and give yourself some kind of chance, because that, in my view, heightens my concern right now, that countries like germany and france makes it illegal for
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italy and spain to export their way -- makes it difficult for italy and spain to export their way out of the problem. >> we could spend all day on europe, but i want to turn to the united states. you heard of this big increase in employment in the private sector, the news of general motors becoming once again the largest auto manufacturing company in the world. is this part of a new trend? do you see this being relatively short-lived? what are the risks out there in the united states in the u.s. economy? given the fact that the real- estate sector continues to be weak, will that continue to be a drag in the future? >> i had a sort of schizophrenic
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view of the united states for some years in the following a sense -- i think the politics is in a mess, obviously. i don't need to tell people here that. that is making it difficult to deal with very profound weaknesses. the fiscal situation is just one. on the other hand, i continue to have a very sanguine view of the private sector. it produces, what, 80% of employment in the country. coming to the conjuncture, i think that the u.s. private
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sector is feeling, as olivier, i think, implied or indicated. they are as profitable as they have ever been. you recently had a moderation in the profit growth. they had exhibited extraordinary productivity increases during the recession the other side of that, very rapid restructuring that has been occurring, including in the banking sector, it is the high rate of unemployment. the rise of unemployment in this country has been very hard. some of what one would consider weakness in the u.s., like the housing sector remaining so depressed -- i actually have a
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mixed view about that. the housing sector clearly became hugely overextended. there was too much building. there were estimates out there of 1 million to 3 million or more access houses in this country. -- excess houses in this country. by the way, the overextension had a lot to do with the financial bubble and the protection of the financial market on the one hand and extraordinary government subsidies given to the housing sector, which continue today, which take all sorts of forms. the housing sector is the most volatile, accident-prone part of the u.s. economy. we don't need any more houses in the u.s. i am simplifying to make the point. i see the come-and-gos in the
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u.s. as being a lower because the housing sector has not recovered, but also being healthier and more sustainable. i think that there are two big risks to the u.s. if the they don't materialize, we will see gradual healing, driven by a very responsive and flexible private sector. the european situation, which is fundamentally comparable -- it is very difficult to tell what this means for the economy in other words, countries owe it $20 trillion. it is a brave man who says what can happen if there is a meltdown of the banking system and how that affects the united states.
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that is one source of risk. the biggest source of risk for the united states is its incapacity to arrive at a political consensus about what to do. we have never seen inequality as extreme as it is in the united steeps -- united states as today. the bottom 90% have not advanced for tenor 15 years. we have never seen the division and the congress with respect of what to do about the fiscal situation and what to do about health care. what to do about defense spending and so on. come 2012, 2013, we may end up
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in even more of a stalemate. the senate could easily change hands. that is the big risk for the guided states. we could be in very big trouble unless washington gets its act together. >> do you agree with that assessment, especially about the risks -- but the more interesting question in my view is the status announcement by ben bernanke about monetary policy all the way up to 2014. we have a lot of expansion monetary policy in europe. the hemorrhaging markets are changing to either become a
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neutral or expansionary. there will be a lot of liquidity in the global economy. it is this going to lead to substantial globalization and volatility? how do countries respond to this new challenge? >> easy questions. and there is one break and one risk. previously it was proved by u.s. consumers. something else has to come if we want to go back to the same level of output and demand. if you go through a list, housing is probably not going to do it anytime soon.
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we don't want consumers to return to their old ways because that could create problems later. it has been reduced largely because of the low growth rates. it clearly takes two to tango and the issue is still there. i think the u.s. has a hard time operating at a level which it should try to operate. there is a lot of uncertainty about next year. we don't know and maybe we can guess, but we don't know whether tax cuts would be spent or not and it makes a lot of difference to the fiscal and balls. that could decrease growth quite
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a bit. there is the longer uncertainty, which is the worry the u.s. will never get its fiscal policy in order and we will see debt increasing forever and maybe default. that worry is probably not justified. my sense is if i look at the way to solve the stability in the u.s., it seems spending cuts and tax increases can do it. at some stage, some has to assume they will see the light. you have to worry that the u.s. t-bonds might be perceived as risky and the spread would
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increase. for better or for worse, it is not impossible. the fact they have the status that they have means it's not going to happen anytime soon. my main worry is what happens to fiscal policy next year. first, on a narrow chance the fed did which is to indicate we keep interest rates flat until 2014, that is the right message. whether it should be an time or the state of the economy is something that can be discussed. they knew -- at their mind, it
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at this stage, it is 2014 or more. the u.s. just does better and it would not be the end of the world. on monetary policy -- the large end leads to large p if it remains large and i have the sense that much of what they have done can be undone if the economy picks up. that is for the most part, not the case. i do not worry about inflation for that reason. i think that's one of the main
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issues that is going to face countries for the next 20 years. decreasing the debt to gdp ratio. traditionally that has been done through a primary surplus and a stong -- strong growth. we're probably not going to have strong growth and there might be pressure to have negative interest rates, above the nominal interest rates. i don't worry about it now, but the temptation for some country to achieve reductions in that way will be there for many years to come. i do not think inflation will come from monetary policy. might come from other things later. >> just one more question before i opened things up for other
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questions. one of the facts that has emerged is if you have low interest rates, you end up with a crisis because it tends to go into a very risky projects. are we laying it down with all of this cheap money sloshing around the world? >> i'm not sure you have an alternative. you simply do not have other policy instruments. you have to get out of the current crisis. to flood the market with liquidity and expand the balance sheets and hope that gives you a contraction -- i guess my problem is these banking systems are broken, so even though you are expanding the balance sheet of the central bank, that is not
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being translated into credit expansion of any size or i don't see any risk from the price inflation side but there is a risk -- its creating a bubble in terms of the italian and spanish bond spreads that is going to mean you see these countries slowing and not meeting their budget -- i'm not sure the policy makers have run out of interest. you have big gaps in these economies and it looks like they are slowing. what else is there other than trying to expand the central bank's balance sheet. i want to ask --
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>> i want to ask your opinion -- china heading for a hard landing. where do you come down on these two points? >> i continue to come down on the side of a soft landing. i am very aware of the concerns about housing, housing prices in china and local government finances following the very large stimulus package and overextension of credit. in the end, not being a deep expert on china, i would appeal
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to the following fundamentals. number one, this is an economy that continues to have strong growth drivers. starting from a low level, a lot of structural change happening and the economy. from a relativity level of per capita income with -- when you have the underlying drivers of growth pushing your direction, some things come easier to take. my former boss likes to think we tend to over invest in infrastructure and that is true
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for about three years. exactly the opposite is the case when you have no growth drivers. everything becomes more complicated and everything becomes more risky. that's my first appeal. the strength for the public sector balance sheets, that is relatively modest growth, if you look at the $3.2 trillion and foreign exchange reserves which is about 60% of gdp, that's a pretty solid situation from which to deal with charts.
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the concerns about credit are nationalized and so it is supported directly. as opposed to indirectly. so, yes, you have to distinguish between sickle downturns and structural change. i have no doubts china can see somewhat slower growth, particularly -- i think the underlying drivers are pretty strong and they should be able
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to mitigate its effects much better than just about any other country. finally, because i want to try a distinction between china and many other emerging markets which people do not sufficiently recognized -- many other emerging markets like russia or brazil do very well, according to a lot of credit assists, in a context where commodity prices are very high and they are commodity exporters. china is a commodity importer. it is a big manufacturer and other exports. during a downturn, a protracted downturn, bought a layman type downturn, a protracted downturn of the global economy, which we could have, those emerging
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markets that are dependent on commodity exports -- countries like china will actually see a favorable turn in the event of a crisis. >> thank you. i think we will open it up to the audience to make sure we have enough time. >> can i say in -- and i say one word -- on the interest rates, desmond gave the right answer. there is no choice. we need lower rates. but we can use macro credential tools. it's still early on and we don't know how to use them right, but in principle, when we see this somewhere, we can actually use another tool in the interest- rate cuts. i think the right answer is get the interest-rate and if you see risk emerging, go after it
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was specific interest. with china, we basically see a soft landing and have the forecast of 8.2% of next year. >> [unintelligible] it will be interesting to see what happens. >> let's open and up to questions. give your name and the institution with which you are affiliated. we have three questions to begin with and we will do it and batches of three. >> i made documentary filmmaker. casque olivier to expand on on how we have the three
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institutions in the european bond market. we have the activities at the european central bank. how are these institutions going to coordinate efforts in stabilizing bond prices? >> my name is james bond. >> it really is. >> i wonder whether olivier hasn't underestimated the capacity of european politicians to grasp the feet from the jaws of victory? i think greece is a foregone conclusion. you can't make predictions about when the fund is out. it's not going to be that big a deal.
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you have to get the germans and french to finance it. i want to turn to china. the question for you -- you have to have a massive reallocation of internal production because the global markets have declined much less. what's the capacity china has to export to local consumption. >> [unintelligible]
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[unintelligible] >> can you take the u.s. once and then i will turn to you for the china question. >> i don't know how to answer questions.
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the euro -- european central- bank is a monetary institution and the other is fiscal. which one should be used to create this firewall everyone is talking about? you can think of investors that want to buy italian bonds for some reason and somebody else would buy these bonds to keep gdp low and some people have suggested the european central bank could do it but the european central-bank thinks its can do that and hope the banks by the bonds which seems to be what's happening but it's not quite as direct. or you can think instead of the esm to do the same thing with
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these bonds paribas -- to do these bonds. the central bank is equipped to provide liquidity because it has no limit on what it can do. when it comes a solvency issue in the sense you're not sure what you and you will get back, it is not sure -- it is should be the case that it is absorbed by someone else. there are structures that could absorb losses but in practice, one has to be pragmatic and be able to build fire walls. maybe not exactly as some would hope at this stage, we're just trying to predict altogether.
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they just add it up and hope it is enough. the implications of the collapse of the eurozone situation? >> [unintelligible] i will take your second question which is much easier to answer, on nominal gdp. you should care about inflation and activity. if people understood exactly what the central bank does, there are be no reason to go further. it allows you if you do it in terms of level targeting and
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nominal gdp, it allows for more inflation for some time to get back to the level target and has a number of advantages. from a communication point of view, it has possibilities and the fed may consider it again. >> perhaps you may be brave enough to take the implications of the collapse? >> if the euro were to collapse, that would be a huge shock. you would be talking about europe going into a deep recession and the euro plummeting against the dollar.
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what you are talking about is you look at greece and portugal and you talk about a trillion dollars of sovereign debt. it would be a huge shock to the european banking system and the united states. that's the reason why the europeans are not going to put up a fight to try to hold something that i think cannot be held up. i just want to say one word on the firewall. i don't think one should attach much to the firewall. the loan to greece, commits to greece are something like 10
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million euros. if you talk about the policies it is selling in the end -- i don't see this as having an issue of liquidity or solvency. it might buy you some time but it is not going to solve the problem. when you have a credit crunch going on, i don't think the result can be a happy one. >> the firewall is a second step. going the other way would be dangerous. >> on the china question?
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you're welcome to answer the other two points that we raised. >> i agree that the collapse of the euro would be a catastrophe for the world and for the united states in particular. not just for the europeans. on china, i a never understood why americans sorry europeans recognize is difficult for americans to effect the savings rates of their consumers. imagine if you went to tim geithner tomorrow and said you should increase the savings rates of american consumers by five percentage point. he would look at you and say thank you very much.
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somehow, the chinese can do this quickly. not so easy. sometimes, we're fighting the last war with china by focusing on the global imbalance. the deficit has come down big time. that is a result of increasing imports and accelerating domestic demand. fast-growing but slower growing
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exports. today, the big surpluses are in germany, 6% of gdp, sweden, switzerland, the netherlands -- switzerland is a serious account surplus. a lot of countries have significant current account surpluses much larger than in china. china cannot operate directly on the savings rates of it consumers. it can operate indirectly and has a lot of needs. people forget china's per capital income is about one- tenth. the idea the chinese don't need more is ridiculous.
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they have a lot of scope for government investment, for increasing government spending, their wages are rising rapidly and part of competitive pressures. that is reflected in the acceleration of consumption. there are a number of steps china aficionado's know about which the government could take to accelerate. liberalizing the financial sector, particularly the interest rates paid to small deposits. they have an arsenal of
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policies they could pursue. >> all you need to do is look at the five-year plan and they have the agreements of a strategy very much in place. that is a good place to look at. let's go to the back of a hall. intern with the center for american progress. it seems like you touched on this. one of the issues facing the periphery is competitive this. specifically labor wages relative to the court. if we get more data indicating the situation is continuing to deteriorate, do you think the european central bank might address this by adopting a higher inflation target or any form of easing? >> i'm a recent graduate of the
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school of advanced international studies. in a country like italy, that it demonstrate that the ellet for the country is positive? would that be enough to counter act fiscal consolidation of capital? it's a question about what you mentioned earlier about fiscal consolidation maybe being a positive and could it be enough to convince credit markets that the outlook for the country is good.
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>> you talk about the emerging market and a southeast asia and with respect to jobs and if the euro can benefit from reaching out to the emerging markets. would it china play a role separately from the wto and imf and would that create any concerns? >> i did not get the questions. >> let's start on a competitiveness. and whether that can be achieved. >> i do not think that ec be is
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open to that solution. i think they are committed to the inflation target and they're not going to want to increase it to facilitate freight adjustment. they think it should be done with open eyes and can be done no matter what the inflation rate this. i think that's a forecast and i don't think the european central bank will do anything to help. the problem with competitiveness, there is no question. i have the sense it is sufficiently bad in a number of countries that can only be solved by a social pact in which there is agreement on nominal wage cuts with the understanding the should be reflected in the price of non tradable. that european
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central bank will be helpful on that front. the question many countries face is that they agree it would be better to consolidate more slowly, not because they want to delay but because they realize it is going to decrease the growth. so what do they do? they found a fascinating set of results at the imf that tried to explain the evolution of spreads as a function of the deficit and growth and so forth. markets like it very much when the deficit is reduced and this decreases the spread, but they dislike it when the growth rate is reduced and that increases
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the spread. the net effect is positive, which is the spread increases because what you are getting from improving the fiscal side is you lose the growth side. eventually, growth picks up but the question is what do you do when your country is faced with those conditions? first, you educate the markets and realize the -- you show them the growth implications and improve the credibility of your medium term adjustment. there are a number of rules that can increase that you can put the credibility of adjustment.
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in the mind of the markets in economic terms, you can do structural reforms and you can be more relaxed on the fiscal side. if you take a taxi drivers, which are known to be hard to convince, and you win that fight, you gain more credibility than by contracting the budget by 1%. liberalizing the taxi driver market is not a solution to italy's problems, but it is a strong symbol. >> in terms of the ec be, i think there will be a lot of room to cut interest rates if they see the growth slowing and they see an inflation -- you can
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expect they will be cutting interest rates and expect they will have the second round of expansion. having worked in the markets, i would not hold my breath to try to reeducate them on how to look at things. i think they would be very concerned if italy were to back off saying it's not going to go on the path it said it was going to go. that would lose a lot of credibility and the markets and that is where the contradiction is. that is going to lead to poor growth results and the imf is forecasting italy's growth in 2012 that it will contract by 2% at the you are not going to meet
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the budget targets so i don't see you can regain confidence this way. fiscal consolidation can have very positive effects on market interest rates and i worked and 1992 in sweden where they had massive fiscal consolidation and brought interest rates down. the only difference was sweden managed to get off the pay. that is how they squared the circle. if they do that, i do not see a way out. >> on the emerging markets question, if you could take that. >> the emerging market was whether china will provide support to the europeans.
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adding china is carefully considering that possibility. i think they are very open to it. i am not adding anything here to what you read in the papers. i don't think china will do this unless they are convinced the europeans have a good game plan. why would you expect anybody to do otherwise? i have taken the view very clearly that i think the united states is making a mistake by ruling al the possibility of contributing to the international monetary fund expansion. this is not a gift.
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this is a loan that may never be exercised. if you look at the available estimates of what the euro crisis might do to the united states, it is to lower gdp by 3 percentage points relative to the baseline. i think it could be worse than that. 3% of gdp is $450 billion. that is lost output and unemployment. a disaster in various respects. if the united states was to say
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we will consider an expansion of resources and contribute $100 billion or $150 billion, which would be a loan and not a gift, this would have very positive affects and not just in terms of reassuring the markets and increasing the firewall, but because the united states retains a unique position and it can exercise leadership in a way that no other country can't exercise today, that might change 20 years from now, but unless the united states moves in that direction, it makes it difficult for everyone else, including the chinese. >> let's have another round of questions. i'm going to ask the three
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panelists to give their concluding statements. >> i am an international trade consultant and i would like to ask the panel -- china has this one child policy and that they are raising a generation of people voted on by to grandparents and parents and my observation is they are raising a bunch of spoiled brats that are not going to be willing to work the way the chinese have worked to produce what they have produced in the past. what effect is that going to have on their ability to continue to produce the goods and services people want? >> somebody from the back?
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>> are want to ask what role saudi arabia and the other oil- producing countries play in this economic movement? i'm glad you raised that because what has been missing in this discussion is the oil price. >> i want to raise issues about the american housing market. i wanted to raise questions about the american housing market. when you have a bubble, one of the problems is that you have an overreaction on the downside. the a economists about a month or two ago said the united states housing prices were low compared to that equilibrium by
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about 10%. that is not surprising if you have an overhang of foreclosed mortgages. but the american housing market -- i don't want to raise so much a question as a puzzle. two or three months ago, business week had an observation that fannie mae was tightening up on its credit requirements in order to improve its balance sheet. that to me does not make any sense. you tighten up on the credit requirements and that would tend to push down prices which would make the balance sheet worse. the question is, are we following a set of policies that a make the overreactions stronger than it should be? >> if none of you are
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comfortable talking about the one child policy, i could talk about that. saudi arabia, who would like to speak on that? >> you are very welcome to. >> the notion they are raising the spoiled brats, all i can say the children i see from china do not look like spoiled brats to me. they are quite focused. one of the risks we did not talk about is the market risk and where one can go -- what is interesting is if you look at commodities, most have come down
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quite substantially exit for oil. that indicates the uncertainty in the market, even today. the question is, could they get worse? it clearly could. my team tells me if the embargo on iranian oil actually stuck, the price of oil would go from $100 to $130, but nobody believes it will stick because if they won't sell to us, they will sell to someone else and so the risk is smaller. the really worry someone is the strait of hormuz where 40% of the world's oil goes through. that would clearly be an oil crisis of that type we saw in 1975 and that's a scenario that would change things
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dramatically. >> the american housing market and tightening? >> i would agree that doesn't make sense. you've got a market characterized by excess inventory and you got a foreclosure process going on. we are likely to see house prices falling by at least 5%, which is a drag, so it doesn't make sense to tighten policy. on the one child policy, i have a colleague at the american enterprise institute that focuses on demographics. he indicates that for china, this is a huge long run problem and the sense that this is going to be one of the few countries that gets old before it gets rich. if they are spoiled brat and they don't work on top of that, a child as -- china has a
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problem coming. >> you are welcome to talk about the saudi arabia question or the housing tightening question. >> [unintelligible] i don't have much to add. saudi arabia plays potentially an important role and it's one of the countries there really has the wherewithal and money. they can play an important role in buttressing the -- contributing to the firewall for the imf and for europe specifically. more importantly, i think saudi arabia could play a very
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strategic role in the arab spring. it is not doing enough for reasons that are well understood. this is a regime that is a very particular regime and it sees itself threatened by the arabs spring. it needs to move ahead and think about what saudi arabia needs to look like 10 years from now or 20 years from now with and a democratic middle east at what speed it has to evolve. >> the person who asked the question about the one child policy has left so we do not have to answer that.
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>> rim a student of public policy at george mason university. asia seems to have had phenomenal growth. india seems to have gone down and has not picked up over the last couple of years or so. europeanconsultant on political and economic issues. i have been told by german experts that we should not worry about germany postures, to continue its fiscal consolidation and on the periphery. as long as the southern europeans follow through, germany will respond with appropriate policies.
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the implication they will respond with expansionary fiscal policies is not clear. i would like to hear more on what it the realistic political processes for that happening? -- realistic political prospects for that happening. >> my understanding is the public in germany is not too excited about continuing with bailing out countries at the periphery. i think what the strategy is that if one can get countries in the periphery to sign on to this fiscal combat and -- this fiscal compact, and they can deliver, you would see the possibility of germany moving toward a fiscal union where they would be prepared to entertain the idea of eurobonds.
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but that many years down the road. my view is use and these countries down a path and a -- that they cannot possibly deliver. when have the fiscal contraction, not only will let drive the economy into the crowd, it will make it difficult to meet budget targets and make it difficult because it will heighten the adjustment for t d c in place of light breeze right now. -- the ed just meant that you see and places like greece right now. i don't think this is a viable strategy. >> i think that last july that
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germans and a particular set if the countries are delivering other provinces under the programs, then the euro members would do whatever is needed to fund them until they got back to health. i think that is a genuine, a bed and it's also an incomplete contract in the sense that whether the countries did exactly what they said they would do and so on. there's a notion that if they do what is needed and if they go through the suffering the germans think the greeks have to go through and they respect the targets that are put a lot the way, the germans will finance. i think that's the extent of commitment. i do not think germany is ready to expand in order to do anything for greece. i think that is out of the question. >> [unintelligible]
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say don't know enough to anything intelligent. >> i see the essence of the european problem as a competitiveness issue which we need to get over it somehow. that is very, very difficult to do. in the long term, -- this needs short-term support. in the long term, the solution has to include some form of fiscal union. call it euro bonds, but eurobonds by themselves will not be enough because you are not going to convince people to share liabilities if they have no say over expenditures.
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the long term solution has to be a fiscal union which implies one way or another some form of political union. certainly much tighter than the one we have today. the problem is, in the short term, there is no agreement about who should carry the burden of adjustment. want to carryn't any bird -- any bigger burden of adjustment that may have already and that's the case with a lot of the other countries, including france, though it likes not to be in the forefront of the discussion. in the long run, the prospect of a fiscal union is profoundly barred by the fact that there is no trust. -- profoundly marred by the fact that there is no trust.
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a fiscal union is not going to become a major conveyor belt of money from the north to the south. these are fundamental political problems and they're very difficult to grapple with, especially in the current context where all of the help is needed in one part of europe. that is what makes one doubtful about the sustainability of the current situation. >> thank you. while i get the responses to those questions on china and indonesia, think of a one minute summary of your thoughts. on china, i have a very different view from most people. i have done some calculations that suggest that the fertility rate of china, the number of children one woman has during her child-bearing time would be exactly where it is today even
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if there had not been a one- child policy. in fact, the fertility rate in china is 1.6 and its per-capita income is about $450,000. thailand does not have a one child policy and in fact, the chinese have been doing experiments in removing the one child policy in areas where there are minorities for families that have disabilities, where the children are disabled and so forth. they found that in these experiments, the number of children does not increase. is roughly where you would expect it to be, which is quite remarkable. one of our expectations is you don't need the one child policy anymore. the big explosion is you have a big gender imbalance and that has all sorts of other unfortunate effects which are
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more sociological than economical. on india and indonesia, my view is the big difference in the performance of these countries is only recently -- india's growth rate is being affected recently because of the momentum for reforms and india -- there has been bickering between the opposition and government party is just as you see in the united states, except it is worse in india, if you can imagine that. in indonesia, the growth rate has been above 6% and it has been steady for two reasons. the government continues to introduce reforms and recently there has been a slowdown. i would personally worry about the future of indonesia. but in indonesia, the natural resource-based economy, its growth rate has been driven by relatively high but the prices think of large part to the fact it has a huge commodities are in china right next door.
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the interesting thing about indonesia as well growth rates are high, driven by a natural resource exports, employment has not been that effective, especially on java. therefore in indonesia, the question is how the have high growth rates and the blood that? that's the question indonesia faces -- how do you have high growth rates in indonesia. >> we will leave the program at this point. if you missed any of this discussion, is available in the c-span video library. now, live to the u.s. house. the speaker pro tempore: the house will be in order. the prayer will be offered by our chaplain, father conroy. father conroy: let us pray. eternal god, through whom we see
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what we could be and what we can become, thank you for giving us another day. send your spirit upon the members of this people's house to encourage them in their official tasks. be with them and with all who labor here to serve this great nation and its people. assure them that whatever their responsibilities you provide the grace to enable them to be faithful to their duties and the wisdom to be conscious of their obligations and fulfill them with integrity. remind us all of the dignity of work and teach us to use our talents and abilities in ways that are honorable and just and are a benefit to those we serve. may all that is done this day be for your greater honor and glory, amen. the speaker pro tempore: the chair has examined the journal of the last day's proceedings and announces to the house his approval thereof.
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pursuant to clause 1 of rule 1, the journal stands approved. the pledge of allegiance will be led by the gentleman from texas, mr. burgess. mr. burgess: ask our guests in the gallery to rise and join us in the pledge to our flag and country. i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. the speaker pro tempore: the chair will entertain requests for one-minute speeches. for what purpose does the gentleman from south carolina seek recognition? mr. wilson: i ask unanimous consent to address the house for one minute. revise and extend my remarks. the speaker pro tempore: without objection. the gentleman is recognized for one minute. mr. wilson: mr. speaker, last friday the national bureau of labor statistics released its jobs report for the month of january and revealed that our nation's unemployment rate continues to be above 8%. marking the 36th consecutive month of record high
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unemployment. dr. peter marisi, a business school professor at the university of maryland, recently stated on fox news that, quote, if you factor in part-time workers who would prefer full-time positions, the unemployment rate becomes 15.6%. factoring in college graduates in low-skilled positions like counter work at starbuck's the unemployment rate is sadly closer to 20%, end of quote. these statistics provide further evidence that the president's policies are failing to provide job creation. i hope the president and the liberal controlled senate will work with the house republicans on the 30 bills that we have already passed for job creation through private sector growth which are currently held in the senate. in conclusion, god bless our troops and we will never forget september 11 and the global war on terrorism. the speaker pro tempore: for what purpose does the gentleman from texas seek recognition? mr. burgess: i ask unanimous
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consent to address the house for one minute. revise and extend my remarks. the speaker pro tempore: without objection. mr. burgess: thank you, mr. speaker. mr. speaker, 101 years ago today the 40th president of the united states, ronald wilson reagan was born. it's a tribute to the man that there is bipartisan agreement to the greatness of ronald reagan as president. we hear from both sides of the aisle about his fortitude, his encouraging smile, his positive attitude. he handled the weight of the presidency with such ease. i remember as a young physician in north texas watching as this individual led our country from the tree vails that were vietnam, watergate, stagflation, and not only gave us a reason to believe in ourselves, he said it was ok to believe in yourselves as americans again, and we did. as a consequence we re-established america as a force in the world and we re-established our prosperity. everyone has their favorite. ronald reagan quotes. mine is, as we watch some of the difficulties, arguments between conservatives during this
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presidential year, remember, that if we agree with each other 80% of the time, we are on the same side. and if the 100% one of us is suddenly unnecessary. mr. speaker, i hope all members of the house today will acknowledge the 101th anniversary of the birth of ronald reagan, the nation is forever in his debt. the speaker pro tempore: for what purpose does the gentlewoman from tennessee seek recognition? mrs. blackburn: to address the house for one minute. revise and extend. the speaker pro tempore: without objection. mrs. blackburn: thank you, mr. speaker. i think it is becoming increasingly clear to anybody that's paying attention that this president's policies have failed and are making the economy worse. more americans are out of work than when he took office. at that point unemployment was 7.8%. america has witnessed the longest period of sustained high unemployment since the great depression. more than 8% for every month that he has been in office. when the president talks about the latest unemployment statistics, i think it's
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important that we look at a more pressing issue which is labor force participation. for the past 31 months discouraged workers have been dropping out of the labor force in unprecedented numbers. in june, 2009, which they like to say was the end of the recession, it was six months into his term, the labor force participation rate was 65.7%. today it is down to 63.7%. the difference between those two numbers represents 4.8 million people who have given up looking for work. if the labor force participation rate had remained where it was when he took office, at 65.7%, the unemployment rate for january 2012 -- january, 2012, would have been 11% rather than 8.3%. it is time for us to change policies. it is time for us to get america back to work. the american people continue to
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say where are the jobs? the speaker pro tempore: the gentlelady's time has expired. for what purpose does the gentleman from connecticut rise? without objection. >> mr. speaker, last friday the department of labor come out with job statistics which no one expected. mr. courtney: the u.s. economy added 243,000 new jobs and there was a revision upward for december and november. across the board. manufacturing, service, leisure, service industries, health care, the u.s. economy which has suffered its biggest blow since the depression because of the financial meltdown in 2008 is picking up strength. as the president said congress must not muck it up. we need to pass the payroll tax cut extension which expires at the end of february. fix the doctor's fees and do unemployment compensation f we don't do that the markets will head south on us again just like they did last december. this congress wasted an entire month of january with no
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conference committee to resolve this issue. it is time that we fix this and get it done right away. we shouldn't go home this weekend until we pass a payroll tax cut extension. i yield back the balance of my time. the speaker pro tempore: the gentleman yields back the balance of his time. for what purpose does the gentleman from california rise? >> to address the house for one minute. the speaker pro tempore: without objection. >> thank you, mr. speaker. you know there is a lot that tends to divide this house. tonight in a rule and tomorrow morning in debate we will address a bill, h.r. 1734, which can pull both parties together, something that can address the waste in government, getting rid of a lot of the expenses we have and ongoing maintenance of properties we just don't need. mr. denham: getting rid of properties we can sell off and bringing in new ref nue. not by raising taxes but new ref nigh by selling off the property that are underutilized or excess or have yet to be declared excess properties. we can also bring in local tax
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revenue by putting private development back in these properties. and most of all if you really want to create jobs, not only do we have 30 jobs bills sitting over in the senate right now, but here's yet one more with bipartisan support to sell off properties we don't need, reinvest in properties we can redevelop, bringing in -- reining in the abuse by leasing authority from other agencies. and getting government accountable again. h.r. 1734 will be on the house floor and we'll be looking forward to bipartisan support. i yield back. the speaker pro tempore: the gentleman's time has expired. the chair lays before the house a communication. the clerk: the honorable the speaker, house of representatives. sir, pursuant to the permission granted in clause 2-h of rule 2 of the rules of the u.s. house of representatives, the clerk received the following message from the secretary of the senate on february 6, 2012, and 9:47
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a.m., that the senate passed, senate 2038. with best wishes i am, signed sincerely, karen l. haas. the speaker pro tempore: the chair lays before the house a message. the clerk: to the congress of the united states. pursuant to the international emergency economic powers act, 50 u.s.c. 1701, ieepa, i hereby report that i have issued an executive order, the order, that takes additional steps with respect to the national emergencies declared in executive order 12957, of march 15, 1995. an executive order 12957, the president found that the actions and policies of the government of iran threaten the national security, foreign policy, and economy of the united states. to deal with that threat, the president and executive order 12957 declared a national emergency and imposed prohibitions on certain
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transactions with respect to e development of iranian petroleum resources. to further respond to that threat, executive order 12959 of may 6, 1995, imposed comprehensive trade and financial sanctions on iran. executive order 13059 of august 19, 1997, consolidated and clarified the previous orders. to take additional steps with respect to the national emergency declared in executive order 12957, and to implement sections 105-a of the competitive iran sanctions accountability and investment act of 2010, public law 111-195, 22 u.s.c. 8501, cisada, i issued executive order 13553 on september 28, 2010. to impose sanctions on officials of the government of iran and
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other persons acting on behalf of the government of iran determined to be responsible for or complicit in a certain serious human rights abuses. to take further additional steps with respect to the threat posed by iran and to provide implementing authority to a number of the sanctions set forth in the iran sanctions act of 1996, public law 104-172, 50 u.s.c. 1701 vote i.s.a., as amended by c.i.s. ada i issued executive order 13574 on may 23, 2011 to authorize the secretary of the treasury to implement certain sanctions imposed by the secretary of the state pursuant to i.s.a., as amended by cisada. finally, to take additional steps with respect to the threat posed by iran, i issued executive order 183590 on november 20, 2011 to authorize the secretary of the state to impose sanctions on persons
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providing certain goods, services, technology, information, or support that contribute either to iran's development of petroleum resources or to iran's production of petrochemicals and authorize the secretary of the treasury to implement some of those sanctions. i have determined that additional sanctions are warranted particularly in light of the deceptive practices of the central bank of iran and other iranian banks to conceal transactions of sanctioned parties. the defish yield back the balance of my timecies in iran's anti-money money machine and weakness in the implementation and continuing the unacceptable risk posed to the international financial system by iran's activities. the prohibitions of the order do not apply to property and interest in property of the government of iran that were blocked pursuant to executive order 12170 of november 14, 1979. and thereafter made subject to
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the transfer directed set forth in executive order 12281 of january 19, 1981 and immetting regulations thereunder. in addition nothing in the order prohibits transactions for the conduct of the official business of the federal government by employees, grantees, or contractors thereof. i have delegated to the secretary of the treasury the authority in consultation with the secretary of state to take such actions including the promulgation of rules and regulations and to employ all powers granted to the president by ieepa as may be necessary to carry out the blocking regulated purpose of the order. all agencies of the united states government are directed to take all appropriate measures within their authority to carry out the provisions of the order. i have also delegated certain functions and authorities conferred by section 1245 of the ndaa to the secretary of the treasury and the secretary of
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state in consultation with other appropriate agencies as specified in the order. i am enclosing a copy of executive order i have issued. signed, barack obama, the white house. february 5, 2012. the speaker pro tempore: referred to the committee on foreign affairs and ordered printed. pursuant to clause 12-a of rule 1, the chair declares the house
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that's the stock act passed in the senate with bipartisan support last week. remarks now from house majority leader eric cantor and majority whip kevin mccarthy. dew part of a discussion on job growth and the economy. this is about one hour 10 minutes. >> i am david thompson, moderator, and i would like to introduce our distinguished panel this morning.
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house leader eric cantor, co- author of the best-selling book "young guns." tim scott represents south carolina, one of two freshmen of the committee. the southern company services president and ceo, jobs creator alliance member. consumer find the general managing partner, retired ceo and chairman of the staples. finally, steve case, america online co-founder, case
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foundation chairman. we had a great panel this morning. we talked about growth. the summary of our first panel is that growth -- we view it from our own experience, and we need to find growth -- we define dress as companies that a cheap high sales growth. -- we define growth as companies that have high sales growth. sales growth is the driver for job creation. it allows them to make a profit to reinvest and hire employees. revenue growth cycles are
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cyclical. the previous cycle was consumer- driven. this one is more infrastructure- driven. energy. software and services. finally, we need to optimize our regulations and policies to improve the velocity for allowing companies to grow and create jobs. america used to have a 50% share of sales companies. small business is the heart of america's growth, but some of those small businesses become
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large businesses, like apple. we had a 50% share of the company. today we have 14%. we are still the number one nation for sales growth companies, but we're not a leader we used to be. mohrs sales growth companies create more jobs that will get full employment in the next cycle. we have got to get full employment in the next cycle, and the forecast indicates we are not going to get there. our challenge is daunting. we need to restart america's growth engine. . let me open up the panel.
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washington plays a key role in job creation in the economy. >> first of all, i appreciate the opportunity to be here on such a distinguished panel. and really, the spirit of today's discussion is what this town needs more of. it is about sales growth, growth and innovation. washington can do a lot to inhibit the growth in entrepreneurial activity, it can to elect to inhibit the formation of capital, and can dissuade people from doing what we need them to do, to go about the process of taking risks, because from risks comes growth in sales. we also know that we can do positive things to create an environment where you do have
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extraordinary stories of sales growth. you mentioned a specific industries that most economists are looking at in terms of going forward, and whether it be infrastructure, energy, technology, services, this seems to be, as you indicate, where the high growth and the prospects for high growth is place. washington's role should be to try to focus on policies, tax policies, regulatory policy, that can aim in those industries' growth, but it is not washington possible to pick another way and jack up the economy -- not washington's role to pick another way and jack up the economy. when washington is in the business of choosing which industries should win and which should lose, when washington is in the business of saying people
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should spend their money here or there, it generally does not work. we have seen policies over the last three years of stimulus spending, we have seen increasingly intrusive government regulation of capital formation in the health-care arena and others that have not worked. that is why i think you will see us in the house of representatives talking about new policies, new ways to accomplish what we are trying to do, which is to get people back to work. as you said, small business is something that i believe most people think is the backbone of america. every business started as a small business. we know that growth and the number of jobs is really about small business growth, and the high sales growth companies feed that more than anyone else. that is what we intend to do, and tim and i will bring
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policies forward for small business, a triple tax policies, and to cut small business taxes. those are bills we will bring to the four straight up. that sends a signal that washington really is in the business of trying to encourage entrepreneurial activity. the idea that you are focused on this panel is one that all of us need to spend a lot more time to engage in in a helpful way. >> steve, excited to have you here today. you took a risk in founding aol. you had the velocity to grow. now you're sitting in the interesting position of looking at a situation today with your personal experience of being one of the 4%. what are the top lessons that you think can be applied?
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>> first of all, it is great to be here. when eric asked me to be here, one of the young guns, because i am an old gun. i am in my fifties and it is always nice to be included in a young guns forum. it is a nice to have washington focused on the role that entrepreneurship plays in our nation. in tyson's corner, virginia, in 1985 we will a pretty significant company. i've been focused on investment in companies, including livingsocial, another company in massachusetts. i kind of pivoted from being an
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entrepreneur to backing and helping entrepreneurs and create jobs to it more recently, probably why i was asked to join this, is that in the last year or so i spent a growing amount of time on a policy in washington and get people focused on the role that entrepreneurship has played. we're not the leading economy by accident. in tire industries were based here. we've kind of lost sight of that. when people think about business, they tend to think of it in overly simplistic contexts -- the fortune 500 companies. it is these tight rope companies that have the potential to create significant jobs. in the last three decades, 40 million jobs have been created by tight rope companies, accounting for all the net job creation. if you want to focus on the economy, you want to focus on
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jobs, this is the place to focus. the data recently has been troubling. the number of new start-ups is down 23% since 2007. it gives you a sense of that. meanwhile, ipo's have contracted significantly. when aol went public almost 20 years ago, we raced almost $20 million. now companies, because of sarbanes-oxley, they often get sold and when companies are sold, at they decelerate instead of xl right. -- instead of accelerate. startamericapartnership.org website -- we have launched 18 startup regions around the country because we really believe that while providing an
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overall umbrella of resources and focus it is important, ultimately the real action is what happens at the regional level. also last year i was asked to join the president's jobs council. we came out with our report, i think in september or october, and met with the president. this was a bipartisan group. it is to the president's credit to get a gather and understand what is going on here. i was focused on entrepreneurship. what we did was instead of reinvent the wheel, we set a bunch of smart people have been working on this for years and what we get them together and prioritize and figure out which ones can have the most impact and recommend those? that is what we did. many of the things we recommended are the things that eric and kevin and others in the house have been leading on for
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some time. there's not a lot of good news these days in washington around people coming together and solving problems. there is a moment in the next couple of months where we do have bipartisan support perhaps for pro-entrepreneurship legislation. the next month there was a bipartisan bill introduced in the senate by senator rubio of florida and senator koons of delaware -- senator coons of delaware. a bill was introduced by senator warner of virginia and senator moran in kansas, again with bipartisan support. last week, --, prison the white house released the start of america -- last week, the white house released the start up america package.
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things are brewing in the house and senate. there really is an opportunity that we have to capitalize on it and focus less on press releases and more on working together to forge a partnership around and the legislation br. sarbanes-oxley is a key one. the aol spirit is less common these days, and that is a problem because much of a a well business of aol's happened after it went public. there are a number of things in the house and senate bills that will deal with raising the cap and having an on-ramp, which is a big deal in terms of job creation. the second, which also has bipartisan support, is called crowd funding, along platforms
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used to fund projects like a documentary to also fund businesses, with certain precautions. the proposal has some support. if you are raising less than $1 million and the individual investments are less than $10,000, they essentially have been carved-out. that is a big deal that a lot of companies that have a problem because they rely on their own money and informal friends and family money, from that point to real venture-capital it is quite challenging. third, which i think is the most important, but i recognize the most sensitive, is immigration. we have got to win the global battle for talent. the companies are created by people passionate about their ideas. we attract some of the best and brightest to come to our universities, we give them a
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ph.d., and then we kick them out of the country. we say to china, come to our naval academy, but then we kick them out to work for the chinese military. green card to their diploma, at one of the key things. an act with a stem visa -- these are not going to solve all the problems. there are things around the dream act and comprehensive immigration reform that people will debate for some time. but focusing heavily on this issue that is about entrepreneurship and job creation is important. there are opportunities in the next month or two to work on the house and senate, where there is
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enormous overlap. we agree that something is important for the nation to focus on, people essentially agree on 80%, 90% of the solution. how do we make sure the politics, particularly in an election year, don't get in the way of the right policies for our nation? i encourage, i am optimistic, but it will take everybody working on this and focusing it together. aaronson and young, which has its entrepreneur of the year for every year, ast previous winners to come to washington later this month, at a march on washington to make this a real cry for pro- entrepreneurship legislation. >> excellent. susan. >> before i talk about energy, i want to talk about criticality of energy, specifically alleges become a to the american economy. 20% of the gross domestic product was dependent on electricity. in 2008, 60%.
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that is reliability, affordability, and optimizing of those three things. for our business, when our communities grow, when businesses grow, when our residential customers have jobs and more income out of business growth, when i talk about energy and electricity, it is and i just about our industry. it is the impact that energy and electricity has on the tire economy. -- on the entire economy. , from 2007 toth it 2010, the most lost in a recessionary period. we find ways in to make sure that blind date and our creed,
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they are successful? steve was talking about two keep things. for us, it is about the creation of jobs for companies to continue to grow and be successful bid the second piece is the skill issue. i have been very involved in education for companies. one of the concerning long-term things is that we need 21 million new jobs by 2020 to reach 5% unemployment and to meet the growing population that -- in this country. even if we are able to create those jobs, only 30% will have college degrees, about 2 million scheider it also, the decrease may not be in the right fields. business -- we have got to get in there and build the skills that we need. we can create the jobs through things you already heard. your key issue is regulation,
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overreached in regulation. what can we do to make sure that we can start businesses quickly so that foreign direct investment chooses to come into this country? so that we are a draw for foreign direct investment. the world bank recently stated that the united states is 27 in the world in terms of construction permits. if i'm going to invest in manufacturing facility, that is an issue. the price of electricity -- we have been very successful in attracting automotive, steel manufacturing. the last big steel manufacturer from europe who located in power area for the price of electricity is a key part of the decision. the sectors are so tied together that we have got to make sure that when we make decisions on health care or we make decisions on energy or would make decisions about infrastructure,
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we look at the impacts and make sure there are not unintended consequences. at the same time, that we make sure we are investing in our future workforce, that ournot only with the numbers, but the right skill sets. that is not just college graduates, but skilled technical professionals, craftworkers, caretionists, health scar specialists. >> you love education. it seems that there is this real world education happening and we are trying to get on the same age, and there is the need for management teams for -- you have less friction, more velocity, more people on the same page, make decisions faster. from your experience in education, how do we do that quickly? it is easy tb not on the same page in just be focused on his core growth or conservation of capital.
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from my time at mckinsey, a management team working cross- functionally is the hardest thing to do. >> from a business standpoint, i think some can help as long as everybody is moving to the same goal. there is a healthy tension that i think is very good. for education, what is most successful -- when i was in florida, i was on the state school board -- integration of the curriculum of the schools, where superintendents sat down with businesses and said, "what kinds of workers do you need?" spending $3.5 billion a year on remedial activities so that they could participate in the workforce with the skills and they need it. we have got to do that earlier. courier academies -- career academies, the same academic
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record. by the time they graduate, they were at 100% passage rate on our pre-employment test ban would just as qualified to go to college to be engineers or accountants. graduation rates were 96%, and this included at-risk kids. i believe that to make good decisions for education, we have got to have stronger partnership between business in these communities and the schools, and that businesses are not just saying, well, shame on you, but we are going to help you develop whatever kinds of skills force it unique in the future. >> on that topic, one of the things we've done in charleston county -- we have forced protections for military vehicles. we had to create an alliance for technical colleges and county
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schools in order to create that integration so that we would have the work force for the futur. they are partnering with my old high school to make sure they create a workforce they need to be competitive on a global scale. without that integration, we see the lack of necessary tools to be competitive in our country. from a global perspective, we that it completely. look at the fact that overall taxes from the local government to the federal government is 30% of the gdp did you add that to the untrained work force, in a global economy, it just doesn't work. attracting more revenue into our local schools and treating the integration necessary to create a platform in the future.
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>> i appreciate steve and eric and others working to change policies in washington. there is a big divergence from the theoretical policy of the top. we have an easy money policy. it is not easy for small and emerging businesses to get a loan. it has to do with incentives we create for bank examiners, all of whom aere covering their butts. the risk in compensation as part of the dodd-frank. every company has got to write this treatise as to how senior management is not induced to take risks. [captioning performed by national captioning institute] in theory, that is ok. i am chairman of the conference committee. the staff came up with a letter indicating their approach to
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this policy. they went all the way down to the assess it. -- associate. i don't think this is what the sec has in mind. "would you give us a detailed analysis of whity you induced your sales associates to take on risk?" give me up rig -- give me a break. i am sure there is no immigration policy that says we should harass people and our borders, and yet we do it every single day. if we had at administration -- but it -- if we don't have any ministe -- an administration devoted to helping small business instead of getting in the way. >> the administration is devoted
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to micromanaging small business in order to wipe out any risk to a business or an industry. what has built this country is the fact that more people from different backgrounds have gotten more opportunity through economic freedom. it is not through a government informant that tends to come in and describe what kind of risk profile or scenario is going to take place on the floor a of a showroom. it goes back to come in the very broad sense, we don't want policies that this town determines is through a certain industry or this is where capital needs to be allocated. the role of government should be that we want to create an environment where laws are properly and transparently enforced, that everyone is operating under the same rules, and that we make sure we bite out unlawful behavior -- we wipe
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out unlawful behavior and enforce the law. we don't want this town and its regulators and its policy makers coming in and telling companies like compaq, aol, or boeing -- >> in boeing they cannot work in south carolina. >> that is a sure way to snuff out the innovation and ingenuity that has given rise to the greatest nation with the greatest prosperity in history. that.nbelievable to hear i go home and talk to people i represent, and it is very difficult for them to access to financing. because of the pendulum has swung so far and everyone is worried about getting in trouble, so there is nothing going on as far as access to capital and business formation. some, and there's
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there are signs that perhaps it will get better. but right now we ought to take a thorough look at the things that are standing in the way. that is why for the last several months, the hosuse that steve referred to has been aggressive on smart regulation. we don't need ideological pursuits in this town that will snuff out the growth we need in this economy. maybe there is intention to want to do good, and washington can wave a magic wand and make everybody better. but again, the success that america has been built on, free markets, an almost chaotic but incredibly attractive, innovative society. it is not through some sort of machine that washington creates that we are here to go and tinker with. we are here to have a set of laws equally applied to
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everyone, and to ensure that those engaged in unlawful behavior are held to account. >> i should probably say at the beginning that i bring a certain perspective to this, which is i don't think of myself as republican or democrat. i think of myself as american. my focus right now is trying to build bridges and get something done. there is an opportunity to get something done. there are big issues facing this nation around fiscal policy and the deficit, the right level of regulation, what is the right of love that. around taxes, what should be simplified, what is the right level of taxation, particularly in a global economy. military issues, foreign policy -- those are big issues. they needed to be batted around. that is what elections are for, and we want to debate this year, and the american people will decide which side of the issues they are hundred but right now
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there is an opportunity to get something done around pinetree your -- around entrepreneurship policies. everybody agrees it is important, everybody understands how america was built. there is interest in the house and senate, republicans and democrats, and there is interest in -- and considerable momentum at the white house around these things. if you look at what we put out last week with the legislative agenda, the state of the union, there is clearly a recognition that i.t. is an important thing to focus on, and it is time to try to -- >> i will hop in. let me tell you, i agree. all of us want growth, more entrepreneurs, more volume in terms of height with sales companies. the words have not matched the actions. we are trying to force that, we really are. all of us want to work together.
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when you deal with the sort of rhetoric that has been so omnipresent in this town about dividing the rich and the poor, instead of saying we are all in this together, we need people like you, we need all people in this together, because successful people can help those who are not. the tendency to want to go and pit sectors of society against one another is very dangerous. i think tim will tell you, that this is the frustration that we want to do some good. we have to set aside the kind of nonsense. >> he hit the nail on the head really well when he underscores the philosophical disconnect in washington. there is a philosophy that i guess our responsibility to divide the pie is equally as possible and protect american citizens. the other side says that we have to grow the pot, and the goal is
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not to protect citizens so much as it is to unleash the individual and see what the maximum potential is. steve h h.r.2930, an opportunity for small investors to get in the game. do we want to be a high-growth market place? if we want to be a high-growth market place, what are the remedies we can bring to the table? most of the remedies that business owners what have nothing to do with washington. when i started a small business in 1999, i thought might 199240 sx was an asset. my banker helped me realize that you cannot get a loan. ok, good. it taught me about forming partnerships with people who would have investments in time this is with a long-term plan for growth. because i had good relationships, i was able to
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start my business with a loan from a friend. when you look at the restrictions and constrictions from capitol, because of some the policies we have, we can destroy jobs. we simply cannot create jobs. there are legislations we have been working on that will move forward -- allowing for advertising and marketing to invest in the resources and make your company grow, whether or not it is simplification and phasing in of sec requirements that allows for ipo's to happen faster. when i went out in my district ended a regulation tour, we found that dodd-frank has had a major impact in an negative way on our construction growth. he talked about 42% of our developers gone permanently. finding a long, having a 40% or 50% requirement of skin in the
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game is a hurdle to high for most developers to get involved in. because the department of energy wants to now regulate your decorative fireplace as a primary heating source, another loss of 10,000 jobs. over and over again, not even mentioning boeing at the effects of big corporations and big business. the fact of the matter is that we restrict the formation of capital and eliminate the incentive to loan money, you find yourself in a quagmire that it is difficult to come out of. eric has been saying for the last year and half, almost, jobs, jobs, jobs. >> 90% of john grisham comes -- of job creation -- thereat and suggestions about raising capital. -- there have been suggestions about raising capital.
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but the theme of execution of regulation so that companies can grow efficiently is paramount right now. as you come through that inflection point of 50 million, it is all about velocity. you cannot spend more time looking at risk. it is all about planning for next year's growth and hiring more people. how do we solve the problems of regulation reform so that we can move faster? >> i think there are two levels to it. i recognize it coming here that this is a strongly republican audience. i also recognize two weeks ago when i met at a democratic house retreat, it was a heavily democratic audience. some of the things i told them, they did not want to hear it may be some of the things i'm
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telling you, you do not want to hear. but i think there is a time to come together, and if you look at the specifics of what needs to get done building bridges around that is critical. wantis a moment we don't to lose and requires us coming together over the next few months. there is more support than there was a few months ago from the white house. it will solve all the problems you are talking about here, but it will solve some of the problems. the broader issue of regulation i break into two parts. instead of the macro-regulation issues -- some of these aspects with capital is critical, which is why sarbanes-oxley is important to focus on trade and then there are regulations that relate to specific industries -- energy, manufacturing, the internet space, things like sopa. one of the things about the internet that may accompan -- tt
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made aol possible is that the government did it right did they invested half a century ago with the defense department to essentially create the internet -- >> was that al gore? >> a little before al. although he was a big advocate on these issues when we were starting. but then they adopted a relatively hands-off for regulatory policy that has allowed to flourish. because i.t. is now such an important part, it is not surprising that there is some of these debates. that is a good model. there is a role for basic research, there is a role for university research. we need to a better job of
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commercializing it and getting those ideas into the entrepreneurial sector. that is figuring out how to unleash these industries so they can grow in the united states. there are a lot of corn plants that i do not want to lose sight of. the big focus on globalization is on manufacturing. the story as told is that over the last decade, we have seen a real acceleration in the globalization of entrepreneurship. what had been and still is the secret sauce of america is being replicated in other nations, who are putting aggressive pro- entrepreneurship policies themselves. very successful than to cabalists now have more people -- the china -- very successful venture capitalists now have more people in their china office. this is not the time to get complacent. the only way to do that is to
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come together and pass pro- entrepreneurship legislation, whether it it is and the house, the dream act. we did not want to put too many ornaments on the tree and not get anything done, but regulation around sarbanes- oxley, tax policy in terms of the right types of tax incentives around capital gains. if we get those in place, we can usher in the next wave of american entrepreneurship and remained a world posthumous entrepreneurial -- the world's most entrepreneurial nation. >> there is a couple of you ready to jump in. >> i used to be a democrat, too, but then i started a business. i realized what these policies mean. taking two is, we're steps back at the same time. let's talk about venture
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capital, the business i'm in today. dodd-frank now -- god knows the systemic risks on a venture- capital -- is going to regulate a venture-capital firms like hedge funds and everything else. thanks to the fact that with a venture-capital money for president, we will make the taxation on carried interest an election issue. we have to start taxing that as ordinary income? what? i doubt that we care about that one way or the other, personally. but if you start taxing and capitalist -- taxing venture capitalists at 40%, the prorate is going to change, the valuation for start-ups is going to be affected. we are making progress on one side, we're taking it away on the other side. >> when we talk about regulation, the majority leader
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mentioned smart regulation. smart regulation does not choose winners and losers. in the energy industry -- the president said this in the state of the union also -- we need all arrows in the quiver. the genius of the and, tyranny of the or. i would not have just southern co. stock, because you need a diverse portfolio. we are all in all five of those areas. we have to incentivize the list and say that we want to take smart is, educated risk, have education to help us be safe and secure. beyond that, the markets work. you will see that the winners will come up. it is not mean you don't need short-term incentives. a lot of them going on through
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the department of energy through the decades. 21st century coal is going to catch up 65% of carbon dioxide. we worked out for a decade researching that with the seed money from dod. people say that china has -- they own all the new developments. we actually licensed that technology in china. government has able to provide seed money and incentivize. we are an industry that take that and find who the winners are. when you find out who the winners are, that takes care of that. >> do you think there is a mis perception about with companies that categorically, they are doing the right thing, but there is always 10% that are not, and the regulation is always going
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after 10% that are not. >> i don't think it is 10%. i think it is less. >> this goes back to the statement, it is almost like three -- three steps ways we can work together. when the president unveiled his jobs agenda back in the fall, my immediate reaction was this all or nothing approach he came forward with will not work, because of notes to people are going to agree on everything. we ought to find division in common. -- no two people are going to agree on everything. we need to go and execute now. there are plenty of bills sitting over there. and i knew we are right on 30 bills the house has put over into the senate for them to pick
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up. if the president could join us, there has been up -- and a perceived shift in the rhetoric, i would like to see some action put behind the rhetoric. again, there has been too much indication that there was some other mode of a round of policy making and support coming out of the white house. it was not all growth and growing supply. it has really been much more about dividing, not multiplying. we need to take about multiplication, not division. that is what growth is about. we should be able to agree on that. if we can set aside the rich versus poor stuff and say we want everyone in america to be successful, we know some are not as successful as other.
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-- as others. go to group-oriented company so other people can become successful. i hope we can put this into execution. >> there is no doubt the facts are that at the top of every growth cycle, everyone wins. the government gets more revenue, the poor gets a job and salary some of the middle class grow and you reinvested your profits back into the community. how do we get everyone on that page, which has a bigger impact? >> is those who are feeling they do that have an adequate job opportunity or are really out of work, how do we get them back to work? it goes back to your mention of the industries where we know there's a lot of growth
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potential. we should go about trying to put aside up to the world we're open for business. that is really what it is about. the governors of the past seven very successful in attracting headquarters to relocate to our states because we're open to business. we do not want to punish success. going back to the bad actors, we want to punish them, but we need to get the jobs in and wealth distributed in a way that people can believe that we have a growing economy again. what washington says i want to tax at you because you were too successful, like the buffet tax, that is anti-growth.
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we need a buffer role that says we need to stop the government from overly intruding into the spirit of ouro country. if we can stop that talk and try to level the playing field and give everyone a chance to succeed, we will be a lot better off that goes to the point of finding the sweet spot so we can all agree. >> everyone can folks around customer needs. small businesses, start-ups, mid market and larger companies, how do we get everyone focused on the customer, which are the job creators, to rally around what we need? >> we have covered some of it. ultimately it is the private sector. government creates the context, but ultimately the action happens with of deplores --
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treprenuer's willing to take risk. that is the story. i think of america and not just because of the economy, but the people who came over in the first place, came over on boats without knowing what was happening was pioneer's willing to take risk. that is what made suv. it is the envy of the world. not a silicon valley, but the american ecosystem is the envy of the world. as i said some of the others are figuring this out of stepping up their game. i think we're doing the right thing in terms of what is happening in the house and senate, republicans and democrats to focus on role of dr. connors. there has been great research and great work from any think tanks that highlight the
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importance of this issue. if you were concerned about unemployment and want to find people jobs, high-growth is the solution if you are concerned about the competitiveness of the global world where other people are getting much more aggressive and smart about this thing, entrepreneur high-growth companies of the answer. it was not true a year or two ago. focusing and this is a key issue of the nation. there is reasonable clarity. there is reasonable clarity our role immigration plays, regulations around capitol play. now the question is, how do we get this done? recognize and all these conversations they have looked
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at me like i am naive. they looked at me like do you really think anything is going to get done as we move into election year? i think something has to get done. we have to seize the moment -- moment. my focus has been narrowly on this. we have to figure out some way to bridge the divide and bring people together, because it is the best way to get the economy moving. >> in the past -- last few minutes of the panel, i want to raise the bar. we have to get 12 more million jobs. we're doing great things. there is a window of opportunity for a few months, but that is not enough to create millions of jobs we really need to do here. i would like to say we a been a great nation in the past, but where our share of revenue growth is declining, not going up. we're still a leader and what we're talking about is good. there is a window of opportunity, but that does not
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eat enough. what we need to do to raise the bar? our country is in crisis when it comes to jobs. there is not a lot of patience anymore. people are giving up. what we have to do to raise the game. we do not have time to keep arguing. our ideas and initiatives have to be bigger and bolder to create more and more companies. we have an avenue revenue growth rate of 2.2 a year. we're not talking about 5000 -- 5. this is a big number. >> i agree. we have to be bold, and has to be about growth for america. so all of the things that divide us, whether it is the fiscal issues and others, and we know elections are there for a reason. some of those will be decided
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there, but we can all agree you need to create how many new jobs? >> the due to clear yet it will be 3500 in construction and 800 permanent jobs. >> you said by the year 21 million we need 21 million new jobs. that is our goal, and we should put that out there is a goal, and we have about eight years to get there. what is that, about 2.5 million a year to go? how do we do that? it will take immigration because we need the smartest and brightest to come here and help us. but at the graduate and dr. programs. there are 74 nationals out putting -- outpacing americans even here now we want to track them. we have moved in the house towards that end.
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we need to do more of that. entrepreneurial visas, and we need to extend that program. we need to say what kind of capital formation will need to happen to create those jobs? let's plug that in. this is not rocket science. this is a are running a pro- growth agenda so that washington does not inhibit the growth, because as i said earlier, this country of ours does it better than anyone else. there are a lot of people tried to copy us right belt, but we have at the core. let's set up a plant and do it. and do it.plan anplan we have to come to the back but
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we do not do this, we will not have a success story. it is about being bold and agreeing to say set aside the things we disagree on, and let's try to get the goal with 21 million more jobs. >> sometimes we look at the jobs here for americans, and that is great. but in a global economy and our american workers need our share of the global economy. what that says in the southeast is it has been a little flat for us. industrial has done really well. we would like for a lot of it tuesday on our side, but it is great that we of the exports. we have american companies that are selling our products all over the world. these are great jobs. when latin america is growing or china is growing or different places are growing, that is good. we have to make sure american
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companies in the american workers get our share of the global share. >> if we're going to get serious and it does plan in place, how does american-based multinationals get their piece of the global pie? global taxes is huge. it is operated almost with both hands behind their backs because of the tax policy. you can see the problems in the town because there's so much rhetoric about singing if you implement favorable tax policies for american-based multinationals, they will create jobs overseas. and we have to realize success for americans overseas mean success at home. that tax policy needs to be a part of it. we have differences on that, but i think incrementally we can say if we could do things tax-wise to help pro-growth companies, we should be doing it.
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>> let me try to close on an optimistic note. now is the time to focus on what brings us together. it is time to focus on what can get done and try to get it done. going back to your question, while i am worried about america's position in the world and entrepreneurial spirit of the world, the reason i am optimistic, if we can get the government to put the right framework in place quickly, is spending all of the time -- my day job meeting with the entrepreneur worse who were extremely excited about the future. and if they are excited all across the nation. they believe they are born to change the world. they believe they will create a great company.
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maybe take years ago their record to go work for wall street, and more and more of the people are interested in working for start-ups. there are still a lot of great ideas out there. the next decade will be the glory years. a lot of things happening around education. huge move towards a digital technology in paradigms' in terms of what individuals can do. those industries are huge pillars of our economy and have not been disrupted in a way media and communications have. there is enormous opportunities around entrepreneur oriolship. we need to make sure we accelerate that by having the right policies in place. >> looking for opportunities for comment ground, i am not sure we should look for ways to negotiate differences.
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philosophically we are on different pages, but the real opportunities for common-ground issues based on what the president has said it eric has left us fighting for is all of the above strategy. he mentioned there is an opportunity to move forward on that. second area he said not this past speech but in 2010, he talked about restructuring of the corporate tax rate, which is huge. allowing for repatriation would be a fantastic benefit. third place was the capital gains tax. talking about eliminating for certain businesses. i think those of the areas where we already have common ground. if we can get him to move on those issues, we already have leadership moving in that direction. here is an opportunity. >> i want to piggyback on
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something steve said this country still has the largest number of patents in the world. the entrepreneur ship is alive and well, we just have to grow into businesses. steve talk about colleges. there was a school that did the career academy come in this young man was a junior in high school, started his own company. by the time he graduated, he had been certified in microsoft and had his own business with five employees. when he walked across the high school stage. we have people out there starting at very young. let's keep these in our school, the get businesses involved. we have the talent. we still lead the world in innovation and entrepreneurship. have you fertilize it and make this grow to where we continue
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to be the greatest country on the face of the earth? >> i can see the wheels turning. >> i want to believe, but i do not. look at trade. we talked about foreign trade. this administration has that done as simple new trade deal. it took three years to approve the one stunned by the bush administration. talk about the foreign corrupt practices act. we cannot compete come up because you were the executive there. you are fighting with one hand tied behind your back. this whole mission of the tax rate from getting a lower tax rate would be great cover but you can already hear the rhetoric coming. giving away too big corporations
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again. it is not going to happen. >> i understand why there is cynicism coming in the likely feeling that nothing will happen. my parents thought it was crazy. we're used to people not believing things will happen. i will close with the quotes from last insuperable. at that there were too great advertisements. one is the kauffman foundation. -- two great advertisements. the other one i really enjoyed was the clint eastwood advertisement where basically it said it is halftime america and the second half is about to start. was a very moving advertised it. it was about what we could do more broadly, and i think it was the key driver in the first half
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in need to make sure it is the key driver in the second half. [applause] >> i would like to quickly open up the room for questions to our distinguished panel if you would like. and >> thank you all, very much. it has been an excellent discussion. i am peter reagan with the baltimore consulting group. our competitor has been mentioned a few times, which is mackenzie. we had great news from a recent study we had based on client work. i wanted to comment and give you some thoughts. we found the economics are driving manufacturing back to the u.s. from china to serve as the u.s. market. this is driven by increases in that china. they have increased to a rate that now actually matters. this is very beneficial to
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states like south carolina in the u.s. as a whole. it increases in productivity. we are much more productive in the manufacturing in europe than the rest of the world. some of issues that have come up come immigration. it is critical. absolutely. your story around vocational training is very important we have the college and university mixed with real vocational training in germany is very important. the whole idea around supply chain clusters. if you get a bmw that comes to south carolina, the government will be able to support businesses and education in build small businesses that will be there to provide the network
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to provide the huge number of jobs back from the multiplier itself. those are the things you mentioned we thought are very important. you should think about the numbers not just today, but in the future. in the 2010 number said manufacturing in china. the 2015 numbers, based on current trends said manufacturing in the united states. we need to look at the total cost of ownership. a couple of other thoughts on tax policy. accelerated depreciation is a wonderful way to encourage investment today. and then promoting awareness around this in being able to provoke thought his foreign direct investment, but u.s. direct it -- investment in making sure that happens. >> one other thing that is interesting on your statistics about china, there is the repatriation of call center jobs
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because of technology. instead of building could call centers, people are able to work from home. -- instead of building big call centers, people are able to work from home. >> we are leader in information technology, software, and hardware. if we can use that in other industries as a flexibility tool, it tends to have a great benefit. >> in south carolina you will see united technologies is bringing back 400 jobs from china and mexico building some of the elevators, because we have created an environment that is conducive to businesses and restructuring in our state. >> i appreciate your research, because i think we're coming to the right time. it is scope and scale. >> would any of you like to
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comment about job creation, with like if anyone would like to comment on the keystone project and pipeline project? job creation or others in the industry like that? >> i think tim referred to that. it is a great jobs project. something this administration and the president have calmed down on the wrong side. put your money where your mouth is. job creation really belongs in the private sector, as this into your conversation has been about. if we want to seriously grow the economy into the 21 million jobs by 2020, it is a no-brainer to allow for the project to ensue. from a natural resources standpoint and an energy and security standpoint, and as a jobs issue. >> 22,000 new jobs immediately.
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the question is are we going to position ourselves in this nation to be a place where jobs, or allow oil distribution to go across these? the bottom line, are we going to be a player or not, and the decision has to be made now. we cannot wait until after the election to decide what is in the best interest of the nation. >> hence the cynicism. that is fairly telling. we can do this. >> i am for it. the bottom line is, do we have the will to do it? what do you see as america's future philosophically? the you see america as an entrepreneur were paid in or place that needs to be insulated interpreted as we used to be the super power? closing. ally good any last questions? we promise to end at noon.
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i want to think audience. -- thank the audience. >> there was much controversy friday about whether it accurately reflected the jobs number. how you think this is being spun? how does the gop plan to confront it and how much you think it will plan to midterms in the gop election? to go any time you are creating 22,000 jobs per month, that is a good thing. we welcome the good news. as far as new participants in the market and how that was being interpreted, i do not know enough to tell you yes or no. i saw one study that indicated it was up until june you saw a decline in the number of those participating in the job market's come in since then there has been -- since then there has been a leveling off. there has been evidence to the
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contrary, but i look of the fact that you are creating a quarter of a million jobs as a good thing. we can do a lot better, in this economy has done better in the past. back in the 1980's when you saw us coming off a recession, we were creating 4000 jobs a month. if we're going to reach the goal of 21 million new jobs by the year 2020, you have to do the math. you will have to have a significant number of sustained job growth throughout this time. we ought to embrace it, but always at the bar higher and say we can do better. we can do with. >> i would like to thank the panel. [applause]
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[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> that was panel two of a two- part discussion. we will bring you the earlier part of this discussion in just a few moments. the u.s. house is preparing to and legislative work in about an hour. members will debate a commission to form that will debate properties that could be sold or reuse in a way to reduce the cost to taxpayers. that in suspension bills are coming up at 6:30.
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more from the advocacy group, which was founded by the house majority leader, eric kanter of virginia. it focuses on ways to create a business climate that encourages faster-growing companies. among those taking part is the staples ceo. this is about 40 minutes. >> >> good morning. thank you for coming out out of the super bowl. i appreciate it. an early start for many of you. i am john murray, president of
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the yg network. we are a center-right policy and issue advocate organization that is dedicated to issues like economic growth, free market and job creation. we are of growth of a young movement that began back in 2007 when fred barnes coined the name about eric carter -- eric kanter, kevin mccarty of paul ryan. i want to welcome you all here this morning. -- eric cantor. i want to thank if my friends from the job creators alliance. we're here to focus on growth. growth means a stronger economy. growth means more jobs, and it means a better future for all of us. today you will hear from some of
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america's top growth experts, business leaders, and policy makers. our goal is to bring to the forefront ideas that can be part of the debate in washington about a four that will yield really results. thank you for coming. i want to take a moment to introduce our moderator, david thompson. he is the best-selling author and speaker who wrote a blueprint to a billion, which focused on how america's most successful growth companies made it to the top. companies like microsoft, google, event, staples, tractor supply, starbucks just to name if you. he has been described as a discovers guru who patterns behind billion dollar firms. he has been studying growth and has been a leading expert before
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more than 20 years working at companies such as north tel networks and hewlett-packard, along with mckinsey and company. i want to thank you for coming today. we will be a number of these events through the course of the year. this is just the first, but we think we will be a very important voice in washington as we engage in the debate throughout 2012 and beyond. >> thank you. good morning, everybody. the question i had during the 200010 recession is what is the growth pattern -- 2010 recession, is what is the growth pattern of a company? i wanted to be a better ceo of a growth company and started to do the research of how to be thought of failure to come because they're > odds of success. little did i think i would end up writing a book in meeting some very honorable high-growth ceos along the way.
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i found i wanted to find a quantitative research pattern, and i wanted to find something that others could follow, including myself. little did i expect to be here today. i would like to introduce my panel. this panel is all high-growth alls of companies of different sizes. on my right is president ceo of a process consultant running a firm in the energy consultant. what is really neat about him is his from the international guard. we are applying top gun of flight techniques to the safety of the energy industry. along the way ahead to find different growth companies in different industries. i found the manager of staples. i really love talking to tom, because he built the first
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peoples, and nobody came. 20 years later it is a $20 billion company. joe scarlett, who was on my far left is a retired chairman of tractor supply. i met him and wondered how could a company grow a billion dollar business to compete with wal- mart as the no. 1 retailer in rural america? is it possible for a small company to take on the big goliath? what is in common with each of the ceos is their role models for america's best growth companies in that they use common growth fundamentals. in the next 45 minutes i will try to demonstrate to you that we can face great odds with common management principles. to structure our time for the next one hour, i will show you a couple of charts on growth companies to set the stage.
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the will be a question and answer time. on your right i have written three books and a research report, tried to quantify america's growth companies. one lesson i've learned is we all view growth to the lens of our own experiences. if you are in finance and a cfo, it is all about cash flow. what i find is sales, customer demand is the hardest line item for a management team to achieve. i started by looking at the pattern of sales growth companies, from 1 million to a billion. there are small businesses in start-ups that continue to grow, mount everest maneuvers, and then there are the compound in revenue growth companies. when they break out from being a
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small business, they go all the way to 1 billion. curve, any of the kurdknee ofe which turns out to be 50 billion in sales. if you have a high growth rate after 50 million in sales, the odds of your company going to 1 billion is over 80%. it is possible to grow and $80 billion business as soon as 50 million. it is a statistical fact i hope these ceos will demonstrate that you today. whether you look back in history at mount facebook or staples or tractor supply, you will find they all had a common pattern. if you normalize america's growth company since 1980, at 50 million in revenue, they all had
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exponential growth. every company debt has gone public since then has fallen one of the teeth -- been following one of the three time frames to 1 billion. it is true today with the companies like facebook. and it is going to be true for the next decade. the implication is whether you are a startup, small business or mid-market is this time is helping you achieve compounding or mathematically expend dextral sales growth? that means you have to have an innovative product with a lot of customers. that is the definition of truly a growth company. the cause of sales growth, i will show you the effect is job creation.
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it turns out that of 11,000 public companies since 1980 in america, and i said the public companies because you can find the numbers, but it is true of private companies, only 4% made it to 1 billion in revenue like starbucks in staples and tractor supply, and they account for two-thirds of the jobs created. i call that a lot of disproportionate impact. a $1 billion revenue business is equal to 1000 small businesses in terms of job creation. so it is about success rate. 60% of these companies are no longer in existence. our challenge is not only creating more small businesses and start-ups, but getting them
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to grow to 1 billion and beyond in revenue. they are the role models, and we have a success pattern to follow. if we look at the sales growth companies from small businesses, all the way down to 30 million in revenue, all the way up to apple. i am not here to say size of business, i am here to say they are all growing the size, there is a very cyclical pattern to revenue growth. it is eight years peak to peak and has been that way for the past 50 years. i work with standard and poor's to come up with the analysis. what is also interesting is through the recession we had a rising number of sales growth .ompanies fo that is why we have been really struggling this succession -- recession.
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the good news is we have now bounceback and now up at the 2003 level recession. that is why we had this conversation going on about growth. we're still tactically coming out of revenue growth recession. we are now starting that recovery time. every presidential election ochers in the peak and valley of the growth cycle. through every recovery they will say the stock leaders are different in the business recovery. i am here to say we are changing in this recovery. the last one in 2003 was primarily led by consumer spending in real estate, which was consumption-driven. this is being led by more economic-driven industry like health care, energy, and capital goods. why? because we're spending a lot of money in health care.
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it is not as independent -- dependent on consumer spending, which is really good news. many of these companies you may know, and many of them you may not. did it in diamond for us is the company's you do not know. they aren't the next growth leaders for america coming into the next growth cycle. it is really important, and i cannot stress, now is the time to create in growth companies to create jobs. i want to apart upon you a sense of opportunity and urgency that this is the time. that being said, we are the number one nation on earth for the number of sales growth companies. we have a 50% share in 2003. today we of 14%. we are not growing sales growth companies of all sizes at the rate the rest of the world is.
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we're still number one, but north america -- asia is now generating 30%. to get back to becoming a growth leader, we need to spur more sales growth companies. that means -- i want to share this with you. looking at the public data, the number of jobs created by sales growth companies has been positive every single year in the past decade, independent of the up or down cycles. in 2008, sales growth companies created 400,000 jobs. positive net employment in every single year. i do not think there is a classic definition that we can say is that of growth companies creates jobs and every single year. our jobless -- our challenge is to create more jobs.
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the net cumulative affect of adding 11,000 jobs at these companies -- 11 million. here is my challenge to you for our discussion today the number of jobs created is directly proportional to the number of sales growth companies. we need to read either 1000 total, which is 18 of a publicly-traded stock, or 800 or 600. the implication is growth is what i call systematic. we will use the term growth engine. what does that mean? we have to think about firing on all cylinders for america's growth engine to restart and grow, and the faster we hit the gas on the growth engine, the more companies will create jobs we will create. it is one big ecosystem. i am here to tell you that when
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we talk about growth, the ceos view their business as a system in growth engine. in total, it is almost a growth economy here yet something that i am starting to call growth anomics. it is not about gdp. these companies are the leaders of the rising tide will look all boats. it is a fact when these companies grow, their customers grow. it is a whole supply chain. on that note, i'd like to thank you for my introductory comments. would you like to open up? >> tell us about your company of perspective on growth. >> good morning, everyone. i work at a company called check 6. we're pretty unique in that we teach and apply the best practices from military
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aviation, commercial aviation and space operations. we bring it to clients, which are primarily focused in the oil and gas business. the question always comes down, why are fighter pilots and navy seals going to drink -- drilling rigs to train the cruise? the answer is the scope and complexity of the operation is remarkably similar. the hazards that are faced every day art remarkably similar, and in terms of bringing value to the client, the value we bring is in the culture of debriefing and constantly improving operations in sharing lessons learned. bringing standards and protocols, and finally, training. for a pilot flying a multimillion dollar jet, the training peace is natural, yet
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the drilling rigs are multimillion-dollar operations come into training behind getting someone to be competent and confident and successful has an area to approve as well. we have been in business for about five years. we got a phone call saying how do we get this out to the drilling rig. now we employ close to 100 contractors. we were number 100 on the list for 2011. it has been a great ride on the growth cycle bringing value to our clients, but there is always the way we can do better, and i am glad to have the opportunity to share how small companies affected by what happens and washington. people who have had an amazing experience with the training funded by the u.s. taxpayers.
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we have 80 percent of our coaches are ex-navy fighter pilots. we have quite a few army and special forces, u.s. navy seals, u.s. air force pilots as well. did the part is -- the neat part is they grew up in the system, and the system insured rapid improvement in -- and high-press operations come in the culture is what we can bring. it is how do you insure when the chips are down you have a standard way to think about things and approach operations and decide, do we continue this or leave the fight? that is part of what we bring come in there is of tremendous value in that come because this experience is priceless, and putting someone of this caliber
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and a high-reliability and high gust risk operation is a really neat thing. here is what some of our clients are. the major oil and gas operators. as the blueprint says, you need a marquee client. our first marquis client was diamond offshore. they decided they wanted to change the company's culture. it is a drilling contractor that has 44 rigs. they drove all over the world. they felt they could do better just by bringing on this debrief culture. we work with them for about four years. we have clients with an eve that have resources, and they're willing to apply them in order to change. moving on to the theme of today, what our our growth constraints? but we do not grow unless the customer wants us.
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sales spread our growth. over the past year-and-a-half, the regulatory uncertainty around oil and gas has been a big damper to our growth. i could literally hire -- we have a stack of 40 raise a maze of competent, a former military people that we would bring on board if we had demand. but we just cannot have it. when the president back in early 2010 s that we're opening of florida, new jersey to drilling again, we were all high-fighting in our office. the new condo happened, and not only was the shutdown bad, but diamond offshore moved all of their rigs overseas. not only did the clients not work, they left. and that caused as a 40% drop in business. and the other place where we
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feel we can take this come and where we can get some help in washington is on the faa model of how industry and government work together. many of our consultants have experience the american airlines, united, southwest, and the model of how the government and industry can work together on training, competency is a really good opportunity going forward. specific example is in aviation there is a program called psap, which is a self-reporting program on errors no one saw. the faa shares this information. what are things we're seeing happening that nobody touches come and how we are we going to prevent this in the future -- that nobody catches, and how are we going to prevent this in the future? this provides better oversight for the government and the
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general execution of an industry that is quite frankly very safe until something -- until there is a high consequence of an error in operations. as i mentioned, the other piece we bring is training. we started up a software company taking tools and techniques on how the pinelands for the new joint strike fighter will be trained in distributed manner that is easy to use. we are building this type of training for oil and gas client so they do not have to fly people from all over the world to a training center to train. we can do it all over the internet. the software business for us is a capital limitation, because we have been self-funding it, and easier access to capital would be a tremendous opportunity to get some good training products out the door. that is our story. and it has been an exciting ride. at we actually handed out
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david's book of the bible to everyone in the management team a few years back, and it works. we are very happy to use the resources that have been paid for by the taxpayers in america to produce these tremendously capable incompetent leaders. it is just a question of getting the demand out there to the right clients at the right time . >> tom, my favorite story staples. you built the first peoples. you had all of this excess ingredients, and nobody came. >> over time what happened is the few people that did come they noticed the copier paper was cheaper. so they would tell their
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friends, and the next thing you know by word of mouth, which is the most powerful marketing there is, it took care of itself and the company grew, and now is a $25 billion or so company. since having done that in getting involved with petsmart and carmax, i now professionally invest for a consumer fund. we have about 50 billion in revenues. pink berry is also run by a former that-16 instructor. something about traveling at the speed of light that allows you to manage your business more effectively. honda's a great job -- ron's doing a great job. we are here in washington, and we want to reflect back to what has changed since staples and
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petsmart came into the world. as part of the job creators alliance, you can read about the job creators and the alliance, and you can see what is going on. it is much harder today. let me give you a number of examples. i remember when we started out staples we have venture-capital, and this government ground have we not had venture-capital. -- and this government treats venture-capital like a four- letter word. not long thereafter we went to a bank and said look, i would like to get a loan. they said you're not making any money. i said that is true. they said why should we give you a loan? bass said i have $8 million
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worth of paper clips and legal pads that are bought an incredibly low cost. worst case for your $6 million loan you will have more in value for paper clips of legal pads, and the banking me alone on that basis. today they would have bank regulators in the inspectors crawling all over them. there is no chance in the world we would meet the loan criteria of today's banks. we talk about small business lending, but when the rubber hits the road and the bank inspectors hit the banks, and banks of great companies have their portfolios polled -- pulled. stock options. we started out staples and gave every single associate in the company an option for stock in the company. they all felt like owners.
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it was a great thing to do. for years there was a push to expand stock options. the world comes back and warren buffett made a couple of speeches. the dam broke and now we have the stock options. on top of that come every company has to pay $25,000 per year. that is a non-cash charge. this is just bureaucracy for the sake of bureaucracy. on top of that -- now you do not have ownership anymore. now you have the regulators who say you could only get out a certain amount of equity and options, otherwise you will get dinged by the public institutions and get in trouble. in china they are making stock options very fashionable and to create ownership and that kind of thing, we're doing the exact
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opposite. instead, what we're going to do is create jobs here in washington we're calling to create a $3 million bureaucracy, and they have jobs -- they have $109,000 person the new elizabeth warren financial director, and then we have it comes that or not bad enough, now we have an organization run by a former congressman, who has regulated the account. if you can read some of these reports about regulating the accounts, you will have to say we wanted to read them pure did you will realize this is an absolute total waste of taxpayer dollars going to no end, other than to more bureaucracy here in washington. it gets worse. we have an nlrb who was intent on making it harder for business.
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then we have dodd-frank. let me start sarbanes oxley that comes out. the reaction to scandal, a bunch of misstatement of earnings. now they have come up with this massive bill, which it should be called the account -- account enrichment act, because all of my companies will spend $1 million in one-time fees to become sarbanes oxley compliant. than 1 million in additional audit fees every year to stay things alike. and all the important things. that is not what happened. the password in the computer is not where it got in trouble. this thing has not stopped anti- fraud yet. it is a total waste of company's money, all done allegedly in the
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public interest. then there comes dodd-frank. they talk about risk. a bunch of idiots on wall street created mortgage-backed securities and created a mess for the economy. inch they now put a broad swath across all american business talking about how we have to prevent risk. so for example every board of directors every year has to go through a thorough assessment of all the enterprise risks to the business. boards will spend two-three meetings, committees reporting back on it and what can happen. the world to come to an end, what happens then? we could have a major recession, what could happen then? you have to write it up and talk about it and think about it. furthermore, you have to go to your compensation policies in
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determine what risk-inducer of strategies are there that would create people -- that would push people to create exorbitant risk. if we want to create jobs, we should be taking risks. our board of directors should not be spending their time doing risk assessments. there should be forced to look at opportunities for growth and how to grow their enterprises. there is nothing in dodd-frank were serving oxley that talk anything about that. -- or sarbanes oxley that talks anything about that. i have gone on too long. >> if you think about it, for a company to grow quickly, you have to have speed, velocity. that means you have to have [inaudible] if your car in to double every year, you have to go forward. and whether you are flying a jet fighter, you are looking out 6 miles where you're born to fly.
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when tom is talking about risk, you can look backwards or forwards are risks. it is your perspective of growth and how were you managing. you can clearly hear the different cultures coming into play, risk vs. growth, velocity vs 80. it is a tug of war we find in the growth engine right now. >> i agree with everything tom said, and he is right on target and all of the key issues that are frustrating toi have been wy nearly 30 years, most of the time as president or chairman. it's an interesting business and has gone through tremendous growth since we went public in 1994. we made a huge strategic shift back in the 1980's to stop focusing on agriculture and bart focusing on hobby farmers, people live in rural areas and
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have a couple of acres and a pickup truck and a dog and cat and time on their hands. that change the dynamics of our business and put us on a growth path very different than our competitors. the second big factor was creating a very big and powerful culture focused on ethics, the right people, education and we wound up with a very low personnel turnover rate. when you take those two factors, which are unique, that put us on a growth path. we went public in 1994 and at the time, we were doing $400 million in sales. last year, we finished at $4.2 billion. we went from 180 stores to 1100. we went from 2000 employes to 16,000 employees.
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the list of frustrations you have with regulation, tom went down the line clearly. i was making a list last night about all of the things we grew up with and we learned how to deal with osha and that eeoc and all of that and in the last decade or so, they have a loaded on top of us all of the rest of these things and we grew up observing those things every couple of years. if you are starting a business today and have to deal with all of these things, it's very difficult. then you have to hire a whole team of lawyers to get you through all of these processes. all of these various and sundry acts were done for good reasons, but the cumulative effect is one that paralyzes business and take you off track instead of paying attention to strategies and developing your business. you are worried about crossing the t's and dotting the eyes and
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following all of this regulation. i can't imagine what would be like trying to borrow money today. we had a hard time borrowing money when we got our company going and today, you hear stories about how it is nearly impossible. i retired from tractor supply five years ago and created a leadership institute. we have had hundreds of students come from all sorts of different industries. there are high level folks. we have people in manufacturing, book printing, banks, health- care and so on. particularly health care. those folks are paralyzed by what is going on. health-care people i talk with, they are almost like a government business instead of a private industry.
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look at the cumulative effect of all this regulation. tends to paralyzed people and retailing is probably not nearly as badly affected as many other businesses are. >> we had a great discussion last night about taxes. management teams are quite smart and entrepreneurial. give them a problem and they will find a way to work around it. we would like to know you think what taxes and the complexity because now there is an interaction effect at offshore rigs are moved to other markets, you are sending navy seals off globally. >> compliance has become a full- time job for four people. we have a bunch of attorneys on a retainer just to manage compliance.
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the complexity of doing operations -- growth in the u.s. is relatively simpler for us that when a client hired us to work in poland and now we have to comply with polish tax laws and all of these registrations. it is great to work and we work for 15 different countries around the world and it is great for growth and generating revenue, but the complexity of these operations has become very expensive for us on the tax side. every attorney and accountant gives you a different opinion. you can pay for more and more opinions on what is going to comply with a lot and it is still on us athe directors and owners of the company to decide we're going to do this on the tax side or the accounting side because fundamentally, we are the ones on the hook for it.
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it has been -- instead of focusing on sales, we spend a lot of time focusing on compliance. >> you have been looking money -- looking for money to finish off some software to help you grow your business and hire more people. >> we have a great relationship with our bank. it's a regional bank in oklahoma and they have been tremendously supportive. to get to where we are now, we have completely encumbered every asset personally and the corporation has just to have a line of credit and a small loan. the next step is either going of the venture way or continuing to self fund the growth. that's about slowest way you can move forward. this we are looking for sparks from the outside that are not going to cost 25% of the company, but the bank can't help
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with that because of the compliance regulations. we have a major client that wants this simulation and training these rapidly and now hopefully they will step forward and provide as the capital because they want this product out in the field now because they feel would prevent a major accident if they had it on sight and drilling crews were able to do training on site like the current requirement every two years out of school. they are looking to give us the resources to complete this project, but if it had been out the door six months ago, this accident probably never would have happened. >> the risk on drilling for oil and the cost of failure causes friction in drilling for oil. the fear of an airplane crash or the fear of an accident -- the sophistication of our management
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skills like flying a jet fighter helps to reduce that risk. software, crisis management -- >> currently, the system is set up where the expectation is risk is managed by experience. they have brought on a lot of new people and with -- in the early '80s, when the price of oil collapsed and the industry did not grow for 10 or 15 years, there is a big gap in experience. chevron has to train 500 new managers a year that have very little experience in that industry. how do you bridge the gap to have a culture involved around training? setting up these projects to deliver -- a culture changes
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occurring and they have the resources to do it, it is just a question of having the capital to bring it to our clients and they are helping us out. >> when we were talking about leadership, there are 20-year- old moving billions of dollars of assets, accident free. and they are not there based on experience. >> it is the culture of how they change -- about a train. in the navy, there is a culture of training and we are excited to be part of that. >> that is importing the techniques of the military into management. >> absolutely. sophistication of risk management allows us to free up velocity. all's our challenge across the industries and regulation. how sophisticated are we? are there tools and techniques -- the best ideas are imported
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from different industries and here's one example. for tom, it was the shopping cart. it came from the supermarket business. >> as you look around and talk about going international, you are dealing with a crazy tax code which they have to figure what they owe a different company -- different countries and keep them happy. moving people across borders -- if you have any idea what it's like dealing with the homeland's security department, they literally have a full-time lawyer on retainer in washington d.c. just to go through emigration issues. the cso was going to new york to make a presentation to a bunch of investors. he was held up at kennedy
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airport under the theory he needed a work permit to give a speech. finally, the lawyer was able to get them out of there. that is the way we're treating people at our borders. you hire foreign people, try to get them work permits. finding venture capital in the united states, starting a company and a silicon valley, they are going back to india, to whatever country they're coming from where they don't face same kind of hostility. >> we have to ask ourselves what we are doing to growth in this country. 90 percent the problem is right here in washington d.c. >> you teach and coach management. what techniques and ideas do you see that we could apply to get
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everyone on the same page for growth? >> in our business, it's a matter of selecting the right people and building their skills to get where they need to go. a couple of issues that came up before -- when we talk about sarbanes-oxley, for example, which cost every company a million dollars a year to comply with, why don't we get that thing repealed? all it does this cost money and a layer these things on year after year and we need to take that away. another experience we had was we had with a shareholder derivative lawsuit which took us way off base and cost millions to defend. we had done nothing wrong. was all because of a disgruntled employee. if the loser pays on lawsuits, we could eliminate all this stuff.
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this country spends billions of dollars defending against nuisance lawsuits every year. one time, we were doing something in europe, and the lawyers advised us -- do you want to do this under german law? wouldn't it be safer under german law -- under american law? i said any other law but u.s. law. in germany, there's an independent legislative finds the facts. there's not $100,000 for the discovery. in canada. if you offer to settle a lawsuit, and the person sitting you turned it down, if you do better than your offer or he does worst, he has to pay your legal fees. england is of the loser pays. any legal system in the world is better than our legal system. our legal system is good for one
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group of people -- lawyers. we continue to let this stuff go on. and you haven't even mentioned obamacare. if you are a retailer, you are way better off financially for lower tier employees, paying the fine or the feed them buying insurance. many companies won't do that because it is not the humane thing to do. but the incentives are set up to do exactly that. the insanity is -- i have a lot of retailers for the lower tier associates, there is a lot in place and this is incredible -- and the 2700 pages of nonsense, that there is a rule that says for the lower tier associates, there may not be -- you have to pay 90% of whatever the premiums are in claims. so let's say you are clever and
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find a way of saving money. there's no incentive to do so. they're going to attach it right back on. the capitalist system is to run out the window through an act of congress. this stuff is insane, yet we in the business world are subject to this stuff every day. >> thank you. there's a lot of focus here about the operation of business. one of my pet project is opening up markets. your revenue growth is dependent on how markets are opened up. could you share with us the dependence of your growth on opening up markets and customer demand? >> it is demand driven. clients are a little hesitant to go we are all in and here's a
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giant contract. they give you a test project and that a client will say we like it and we want you to go all over the world. that just recently happened to us with chevron. they said we want you to work all over the world and now we have utilized because we have all of our employees work on embassy staffs. the foreign contract officers has worked out in terms of getting some basic knowledge and how to operate in a new country. once we get basic information from each of the countries, we are able to start moving down the path of understanding the tax situation and figuring out
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how we are going to get paid from all over the world. we just had a project that's about to go in liberia. we almost did not get the jobs because we could not figure out the legality of getting money into the country. it is an impediment to growth, just from a tax and contract perspective for a small company like ours. the majors will want you but you have to figure out how to get in. >> the house is expected to come in and a little over 10 minutes from now. on the agenda is a bill creating a commission that would make -- that could be sold for proceeds or exchanged at reduced cost to taxpayers. we'll have live coverage of four-o'clock 30 eastern here on c-span. the u.s. has closed his to invest -- close its embassy in
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damascus. an american diplomat was pulled out of the country today. the state department urges all u.s. citizens in syria to leave immediately as the violence continues. here are more details from a state department spokesperson. >> i saw your note is this morning and i was wondering if you could tell us what it means for the state of communication between the syrian government given that ambassador for is no longer in domestic -- no longer in damascus to seven we are cutting a line of communication? >> as we notified this morning, we have concluded we need to suspend operations at our embassy in damascus the light of the fact we have security concerns about the safety of our
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personnel. we have been working with many weeks to try to control access but around our embassy facility and we were not able to come to appropriate arrangements there. ambassador ford and remaining personnel the part of the country this morning and the flag has been taken down. we have asked our allies poland, and poland has agreed to be are protecting power in damascus. a big thanks to warsaw for that. any remaining american citizens who have not heeded our travel warnings, can receive services through the embassy of poland. >> how are you going to maintain lines of communication given that you don't have anybody on the ground?
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>> after a brief break in europe, where he will meet up with his wife, ambassador ford will be coming home and set up shop here as have our syria team. the expectation was ambassador ford will continue to maintain the contacts he has across syrian society, particularly with syrian opposition as well the adviser who works with syrians outside the country so we can maintain contact and make sure the syrian people know that we stand with them and their desire for a democratic future. >> will they also be working out of the makeshift office in that interim? >> we have a pretty big staff already in the department, but we will have those that we need to maintain the business.
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>> you did not mention anything about when context the to be made with the syrian authorities whether an american is detained or any other reason, let go solely through the protecting power or will those contacts be maintained as well? >> this syrian embassy in washington remains open as necessary, particularly having to do with security issues. we have done business with the charge and the protecting power will be the business in the way the swiss do in iran, etc.. >> said he received assurances from syria that your property will be protected in your absence or do you expect it to be ransacked in the next 72 hours? >> before departing the country today, ambassador ford did go in to see the foreign minister and formalize our decision to
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suspend and inform him and make sure we expect the remaining vienna convention obligations they have to federal property respected and to make clear the government of poland will be are protecting powers. our expectation is that our property will be protected and i hope is that this is a suspension and when there are better days in damascus, we can reopen. >> this is their first conversation in quite some time >> i'm not sure. i know when this issue came up in december, they had at least one direct conversation and ambassador ford has been in a number of times since to talk to the deputies but i do not think they have had a couple of conversations -- i don't think they have had a conversation in
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a couple of weeks. >> i do not have a fall read out of the conversation. maya understanding is it was relatively pro forma. we do not think the syrian government has a question about where we stand on these issues, particularly given a president's statement over the weekend and the strong comments the secretary had and strong statements from ambassador rice over the weekend. >> some news reports have suggested the death threats are directly linked to al qaeda. some have talked about fighters going into iraq dealing with the getaeda >> i'm not going to
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into the details of our security assessment beyond saying that our concern is that we -- the situation in and around domestic -- in and around damascus is becoming increasingly violent and they are losing control of the situation and it has resorted to violence rather than dialogue with its own people. our embassy facility, for those of you who know damascus, is right at the confluence of many main streets and has no protection or set back to speak of. i will say that for almost 20 years, the government has been petitioning syria to move the embassy to have a plot of land that was better protected elsewhere and we were never able to come to an agreement on that. this is regrettable and not what we wanted. >> some are saying that arab
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states should close -- would you encourage that? >> the number of arab states have taken that measure. our analysis was if we could keep ambassador ford there, our analysis was that would help us maintain contact with the syrian people. we will now endeavor to do that from washington. each nation has to make its own decision on how to make its decision going forward. >> was the exact state of the relationship between washington and damascus? does this mean relations have broken off? what does it mean to not have a physical ambassador there in damascus? >> we have suspended guard diplomatic presence. we have not broken diplomatic relations.
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there is a difference there. >> could you talk about what the u.s. might do next given the failure of the u.s. security council -- the un security council? >> she was asked the what next question and spoke about a number of measures. in a situation where the security council has been blocked from acting in support of the arab league plan and in support of the defense of the democratic path for syria, we will have to take measures outside the un to strengthen and broaden the pressure on assad. to work with as many countries as we can to increase regional sanctions and unilateral national sanctions on the regime, to pressure those
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countries still trading with him, particularly trading weapons or otherwise fuelling his war machine, to stop. the secretary spoke yesterday and you have seen a number of foreign ministers speak about the friends of a democratic syria, countries around the world that stand for transition and support the arab league plan, doing more to gather to support a path forward and provide what humanitarian relief may be possible. to provide political support -- those conversations are going forward among the countries that might want to be part of this kind of friends initiative and we will see where that conversation goes in the coming days and weeks. >> has there been a formal meeting of this group?
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>> we have been consulting with like-minded countries and the arab league and we will see how this develops going forward. >> to you expect any more hardening of the position in syria? what do you expect? >> i would refer you to the government of russia with regard to their expectations. he advises the secretary they intended to do this when they cite other in munich. our hope and expectation is that the foreign minister will use this opportunity to make absolutely clear to the regime are isolated it is encourage assad and his people to make use of the arab league plan and provide for a transition period
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-- provide for a transition. >> did you get any message that they may suspend their operations? >> no. >> if he's coming to visit the government at a time when everyone else is running away -- >> he can make clear what he felt like to be to a 15 on the security council. that speaks to the isolation. 13 both in munich -- 13 members of the council were ready to join this resolution. >> they have china and it's over 1 billion people. yet 20% of the world population. it's not complete isolation. >> its two countries from two parts of the world where the rest of the council is representing four continents. >> why have you chosen: to
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represent u.s. interests in syria? could you elaborate on the role of polish diplomats representing the united states? >> we are delighted the government of poland was willing and able to accept this responsibility. to my knowledge, it may be the first time the vast poland to be protecting power for the united states. >> you can see all of this state department briefing at c- span.org. the house is coming in to debate a few measures, including one that would have to do with certain federal properties. but -- votes are expected at 6:30 eastern. .
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the chair will postpone further proceedings today on motions to suspend the rules on which a recorded vote or the yeas and nays are ordered or on which the vote incurs objection under clause 6 of rule 20. record votes will be postponed -- on postponed questions will be taken after 6:30 p.m. today. for what purpose does the gentleman from washington seek recognition? mr. hastings: mr. speaker, i move to suspend the rules and pass h.r. 306 as amended. the speaker pro tempore: the clerk will report the title of the bill. the clerk: union calendar number 210, h.r. 306, a bill to direct the secretary of the interior to enter into an agreement to provide for management of the free roaming wild horses in and around the national wildlife refuge. the speaker pro tempore: pursuant to the rule, the gentleman from washington, mr. hastings, and the gentleman from the northern mariana islands, mr. sablan, each will control 20 minutes. the chair recognizes the
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gentleman from washington. mr. hastings: thank you, mr. speaker. mr. speaker, i ask unanimous consent that all members may have five legislative days to revise and extend their remarks and include extraneous materials under consideration under this bill. the speaker pro tempore: without objection. mr. hastings: i yield myself as much time as i may consume. the speaker pro tempore: the gentleman is recognized. mr. hastings: mr. speaker, in 2007 the state of north carolina , the u.s. fish and wildlife, the corolla wild horse fund completed a wild horse management plan for the spanish mustangs that live on the 7,544 acres of public and private lands in coastal north carolina. this plan expires in april and the fish and wildlife service has indicated that they will not sign the 2012 plan. h.r. 306 authored by my friend and classmate congressman jones of north carolina requires the secretary of the interior to enter into a new agreement within 180 days of enactment.
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it will also stabilize a number of horses to no more than 130 allowed -- allowing the introduction of a small number of shackled horses to improve genetic diversity and will ensure that the corolla wild horse fund will continue to pay the costs of caring for and managing these horses. mr. speaker, these horses are living symbols of our colonial history. h.r. 306 ensures that they will survive in the future at no cost to our taxpayers and i want to thank my friend from north carolina for his leadership on this matter and i reserve the balance of my time. the speaker pro tempore: the gentleman reserves the balance of his time. the gentleman from the northern mariana islands. mr. sablan: mr. speaker, i ask unanimous consent to revise and extend my remarks. the speaker pro tempore: without objection. mr. sablan: and i yield myself as much time as i may consume. mr. speaker, i rise in support of h.r. 306, h.r. 306 directs the secretary of interior to enter into an agreement with the corolla wild horse fund as well as local and state authorities to provide for the management of
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the free roaming wild horses in and around the national wildlife refuge. the agreement will increase the cap on the herd size to 130 horses and specifies what the privately funded corolla horse fund will cover the costs of managing the herd. catching a glimpse of these horses on the beaches is an integral part of what draws thousands of visitors to the north carolina coast each year. however, the corolla refuge was established in 1984 to preserve and protect the native coastal barrier islands -- island's ecosystem. it provides essential habitat for migrating water fowl and endangered speed, such as sea turtles, which also draws visitors to this beach -- these beaches. it is unusual to protect an unnative species in a wildlife refuge. extra effort and resources are needed to ensure that the wild herd does not impair the
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ecoistics -- ecosystems for the native animals and plants. the fish and wildlife service needs additional funds to accomplish the conservation purposes of the national wildlife refuge. dish resources will -- additional resources will support staff salaries, since no staff is currently stationed at the wildlife refuge. corrals to keep the horses from trampling critical habitat and research to study the potential impacts of these horses on the island's habitats. as we move forward to consider the fish and wildlife refuge -- wildlife service later this month, we should examine the operations and maintenance backlog of the national wildlife refuge system which has been chronically underfunded. we must provide the fish and wildlife service adequate funding to preserve older species in the home of these horses. i thank mr. jones for his work in support of the corolla national wildlife refuge and urge adoption of h.r. 306 and i
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reserve the balance of my time. the speaker pro tempore: the gentleman reserves the balance of his time. the gentleman from washington. mr. hastings: thank you, mr. speaker. mr. speaker, i'm pleased to yield four minutes to the author of this legislation, the gentleman from north carolina, mr. jones. the speaker pro tempore: the gentleman from north carolina is recognized for four minutes. mr. jones: mr. chairman, thank you very much for the time and to the ranking member, thank you for your comments as well. as already has been stated, the h.r. 306 would provide for a new public-private management plan for the free roaming corolla wild horses of north carolina's outer banks. at no cost to our taxpayers. the corolla horses will are colonial spanish mustangs that can be traced back to the arrival of spanish explorers on the outer banks in the 16th century. they survive in the wild for over 400 years and roam across 7,500 acres of public and private land in north carolina. under the existing management agreement between the interior department, the state of north
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carolina, the county and the nonprofit corolla wild horse fund, the maximum number of horses allowed in the herd is 60. equine genetic scientists believe the number 60 threatens the herd's existence, due to high levels of inbreeding and low levels of genetic diversity. to address this issue h.r. 306 would require a new management plan to allow a herd of no less than 110 horses and no more than 130 horses. 110 is the minimum number that leading equine genetic scientist dr. gus corthrom has found to be necessary to maintain the herd's genetic vie vilt. it's important to know that these numbers are well within the caring capacity of the land these horses call home. to improve the herd's genetics, the bill would allow for limited introduction of wild horses from the related herd at cape lookout
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national sea shore. i'd like to emphasize that h.r. 306 requires the corolla wild horse fund not the federal government to pay for managing the herds. the fund is a thriving nonprofit with an annual budget of over 400 -- $400,000 that is growing each and every year. they already pate costs of managing the -- pay the costs of managing the horses and they will continue to do so under this bill. confirming this point, the c.b.o. scored on h.r. 306 found that the federal government would incur no significant additional costs to mitigate the affects of horses on the refuge. h.r. 306 is similar to another bipartisan bill that was made referenced to a while ago that i offered to create a public-private marneship to save the wild horses -- partnership to save the wild horses in cape lookout national seashore. that legislation passed by the republican house in 1998 and was signed into law by president
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bill clinton and i want to at this time acknowledge for the record that his chief of staff was instrumental in that bill becoming law. mr. speaker, the corolla wild horses are a key part of north carolina's heritage and an important element of the outer banks economy. in fact, they're the north carolina state horse. h.r. 306 has broad bipartisan support and i want to thank both parties for that support. among others it is supported by the north carolina governor, curtuck county and the local community. the corolla wild horse fund, the humane society, the american society for prevention of cruelty to animals, the animal welfare institute and the foundation for horses. mr. speaker, in closing i make reference to these posters. these horses have their own heritage, as you can well see. they're absolutely wonderful, beautiful animals and many times on the coast of north carolina when these horses are standing
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in the ocean with their fowl, you will see those tourists come up and pet them. these horses are part of our heritage and thank both parties for passing this bill today. i hope that we will pass this bill today and i thank both sides for this time and i will yield back the balance of my time. the speaker pro tempore: the gentleman yields back the balance of his time. the gentleman from the northern mariana islands. mr. sablan: mr. speaker, if i may inquire on the other side if they have any further speakers. mr. hastings: i'm prepared to yield back. mr. sablan: i yield back the balance of my time. the speaker pro tempore: the gentleman yields back the balance of his time. the gentleman from washington. mr. hastings: thank you, mr. speaker. i just urge passage of this important piece of legislation for north carolina and yield back the balance of my time. the speaker pro tempore: the gentleman yields back the balance of his time. the question is will the house suspend the rules pand has -- and pass h.r. 306. those in favor say aye. those opposed, no. in the opinion of the chair, 2/3 of those voting having responded in the affirmative, the rules are suspended, the bill is passed and without objection the motion to reconsider is laid upon the table. for what purpose does the gentleman from washington rise? mr. hastings: mr. speaker, i move to suspend the rules and pass h.r. 2606 as amended.
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the speaker pro tempore: the clerk will report the title of the bill. the clerk: h.r. 2606, a bill to authorize the secretary of the interior to allow the construction and operation of natural gas pipeline facilities and the gateway national recreational area and for other purposes. the speaker pro tempore: pursuant to the rule, the gentleman from washington, mr. hastings, and the gentleman from the northern mariana islands, mr. sablan, each will control 20 minutes. the chair recognizes the gentleman from washington. mr. hastings: thank you, mr. speaker. mr. speaker, i ask unanimous consent that all members may have five legislative days to revise and extend their remarks and include extraneous materials on the bill under consideration. the speaker pro tempore: without objection. mr. hastings: mr. speaker, i yield myself as much time as i may consume. the speaker pro tempore: the gentleman is recognized. mr. hastings: thank you, mr. speaker. mr. speaker, h.r. 2606, introduced by the gentleman from north carolina, mr. grimm, authorizes construction of a lateral pipeline off the coast of new york city. . it will deliver natural gas to residents of brooklyn and queens. under current law the national park service does not have the authority to approve the
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pipeline. therefore, mr. grimm introduced h.r. 2606 to allow this project to move forward, benefiting not only new york residents but visitors to gateway national recreation area. specifically, as part of the agreement reached with the national park service, historic aircraft hangars located at fort bennett field will be rehabilitated and put into use by the park. and, of course, this bill will promote much-created jobs by providing reliable, affordable energy. the city of new york has embraced this proposal and in particular expressed support for the use of the horizontal directional drilling to safely install a three-mile, 26-inch diameter pipeline. h.r. 2606 has bipartisan support and, of course, it is supported by the national park service. so i urge its adoption and reserve the balance of my time. the speaker pro tempore: the gentleman reserves the balance of his time. the gentleman from the northern
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mariana islands. mr. sablan: mr. speaker, i yield myself such time as i may consume. the speaker pro tempore: the gentleman is recognized. mr. sablan: thank you, mr. speaker. mr. speaker, this legislation appears to be a good solution to a challenging problem. h.r. 2606 will allow for the delivery of natural gas into an underserved area while also providing a revenue stream that will allow the national park service to rehabilitate important structural -- historic structures at gateway gateway area. representative grimm is to be commended for his hard work on this bill. in the past, some have raised concerns whether it's appropriate for congress to direct funding to specific projects such as this one. we are pleased to see when a meritorious project such as this one is proposed, a project which will provide energy resources while also improving historic resources, it is allowed to proceed. we support passage of h.r. 2606, as amended, and i reserve
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the balance of my time. the speaker pro tempore: the gentleman reserves the balance of his time. the gentleman from washington. mr. hastings: mr. speaker, i am pleased to yield four minutes to the sponsor of this legislation, the gentleman from staten island, mr. grimm. the speaker pro tempore: the gentleman from new york is recognized for four minutes. mr. grimm: thank you, mr. speaker. i appreciate the opportunity to speak in my -- on my bill, h.r. 2606, the new york city natural gas supply enhancement act. it will have natural gas pipeline facilities in the new york portion of the gateway national recreation area. i would like to especially thank my colleague and co-sponsor and friend, congressman gregory meeks, for all of his efforts. it was a pleasure to work with him in a bipartisan manner, and we appreciate his staff as well. we'd like to thank the resources chairman hastings, ranking member markey, subcommittee chair bishop, and ranking member grijalva and their staffs for helping move
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our bill through the committee and on a bipartisan basis for their work with the national park service in strengthening the bill as it moved to the house floor. the park service deserves our appreciation as well for all of its efforts over the years for improving the gateway national recreation area and in particular reviving the flood bennett field for future generations. this project will be the first bulk natural gas transmission project in brooklyn, staten island and queens in more than 40 years. the 5.2 million areas living in these three boroughs are wanting more and more natural gas. natural gas as we know is reliable, it's clean, it's domestic and it's economical. on september 15 of last year, new york city deputy mayor testified before the natural pack service subcommittee and in support of the grimm-meeks
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bill explained why it was so important and i'd like to thank the deputy mayor for his efforts. and i would like to draw special attention to some of his testimony. deputy mayor stated, and i quote, energy demand in new york city is increasing and will continue to grow. so getting this gateway project done as deputy mayor said is a major effort that includes the private sector, the city, the state and the federal government. this pipeline will pass underneath both gateway's beach in queens and jamaica bay to the meter station located at floyd benity field in brooklyn where it will then interconnect in the local natural gas distribution system serving the communities in and around my district. the pipeline project authorized in h.r. 2606 will help the park service in the face of severe
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fiscal constraints by authorizing the m.p.s. to enter into a lease allowing the gateway pipeline project to meter and regulator station inside one of the hangar buildings. the meter station is basically a secure building into a building with the hangar building's exterior being restored to its original condition coupled with a lease payment that we expect m.p.s. to put towards restoration of other hangar buildings for multipurpose park use. more important is the fact that the gateway pipeline project will generate approximately 265 million, million dollars in construction activity. that's almost 300 local jobs. 300 construction jobs, and that's about $8 million in annual local property taxes for new york city, providing a much-needed short-term and long-term boost to our local economy. when i came to congress i
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promised my constituents on staten island and in brooklyn that i would find fiscally conservative ways to create jobs and get our country moving again. mr. speaker, this bill does exactly that. not only will it create a unique public-private partnership to revitalize floyd benity field but it also increases the supply of inexpensive natural gas. thank you. i yield back the balance of my time. the speaker pro tempore: the gentleman from the northern mariana islands. mr. sablan: i'm prepared to yield back if the gentleman is prepared to yield back. mr. hastings: i'm prepared to yield back. mr. sablan: i yield back. the speaker pro tempore: the gentleman from washington. mr. hastings: i urge support of h.r. 2606 and i yield back the balance of my time. the speaker pro tempore: the gentleman yields back the balance of his time. the question is will the house suspend the rules and pass h.r. 2606 as amended. those in favor say aye. those opposed, no. in the opinion of the chair, 2/3 having responded in the affirmative, the rules are suspended, the bill is passed, and without objection the motion to reconsider is laid on the table. mr. hastings: mr. speaker, i
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object to the vote on the grounds that a quorum is not present and i make a point of order that a quorum is not present. the speaker pro tempore: pursuant to clause 8 of rule 20, further proceedings on this question will be postponed. the point of no quorum is withdrawn. for what purpose does the gentleman from washington rise? mr. hastings: mr. speaker, i move to suspend the rules and pass h.r. 1162, as amended. the speaker pro tempore: the clerk will report the title of the bill. the clerk: union calendar number 265, h.r. 1162, a bill to provide the quileute indian tribe tsunami and flood protection, and for other purposes. the speaker pro tempore: pursuant to the rule, the gentleman from washington, mr. hastings, and the gentleman from the northern mariana islands, mr. sablan, each will control 20 minutes. the chair recognizes the gentleman from washington. mr. hastings: mr. speaker, i ask unanimous consent that all members may have five legislative days to revise and extend their remarks and include extraneous materials on the bill under consideration. the speaker pro tempore: without objection. mr. hastings: mr. speaker, i yield myself such time as i may consume. the speaker pro tempore: the gentleman is recognized. mr. hastings: thank you, mr. speaker. mr. speaker, the quileute indian reservation is located along the owe limp yick peninsula in my home state of washington. it is home to about 375
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residents. most of the reservation is located within the flood zone and much of the tribal infrastructure, including their school, elder center and housing, is with the tsunami zone. recent tsunamis in the pacific clearly demonstrate the risk faced by the tribe and the need to move housing and infrastructure inland. for the safety of this small tribe, the legislation is -- this legislation is needed that would transfer a few hundred acres from the vast olympic national park to the tribe. that will allow them to move their school and other structures to safer land, away from the threat of frequent flooding and tsunami risk. there are no park-owned facilities or trails in the transfer land, and there are few opportunities in this transfered land for park visitors. to expedite passage of this key -- the key objective of this bill and allow it to move forward promptly, the natural resources committee deleted a
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potentially controversial 4,000-acre wilderness designation that is of no benefit to the tribe. the committee barred transfer land from being used for gaming purposes, and the tribe does not oppose this limitation. so i believe these two changes have removed all potential obstacles that could threaten timely passage of this legs that's offered by my friend and the ranking member of the appropriation committee, mr. dicks. so i urge adoption of 1162, and i reserve the balance of my time. the speaker pro tempore: the gentleman reserves the balance of his time. the gentleman from the northern mariana islands. mr. sablan: thauf, mr. speaker. i ask unanimous consent to revise and extend my remarks. the speaker pro tempore: without objection. mr. sablan: and i yield myself such time as i may consume. the speaker pro tempore: the gentleman is recognized. mr. sablan: thank you, mr. speaker. i rise in support of h.r. 1162, the legislation sponsored by mr. dicks. events in japan, indonesia and elsewhere have demonstrated the devastation that can be caused by tsunamis.
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the quaye yea -- the quileute people live in a dangerous tsunami zone and we support this legislation to allow the quileute people to move to higher ground. i would note, however, that this version of h.r. 1162 is only half of the bill as introduced. the quileute, mr. dicks and other stakeholders have negotiated over many years a version of this legislation that not only provided safety for the quaye yea but also sought to address the -- quileute but also sought to address the needs of the olympic national park. it was removed by the majority despite the fact that the bill represented a popular negotiated compromise. during consideration of this measure in the natural resources committee, the chairman suggested that the park portion of the regional bill be introduced as a second bill to be moved separately. mr. dicks has taken this advice and we hope to see h.r. 3222 on
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the house floor in the very near future. mr. dicks is to be commended for his diligent work on behalf of the quileute people and the olympic national park, and we urge adoption of h.r. 1162, and i reserve the balance of my time. the speaker pro tempore: the gentleman reserves the balance of his time. the gentleman from washington. mr. hastings: mr. speaker, i reserve my time. the speaker pro tempore: the gentleman reserves the balance of his time. the gentleman from the northern mariana islands. mr. sablan: mr. speaker, at this time i recognize the esteemed ranking member of the appropriations committee, mr. dicks, for five minutes. the speaker pro tempore: the gentleman is recognized for five minutes. mr. dicks: i ask unanimous consent to revise and extend my remarks. the speaker pro tempore: without objection. mr. dicks: i rise to urge passage of h.r. 1162, the quileute tribe tsunami and flood protection bill. i also want to thank the house natural resources committee for its work in shepherding this bill to the floor today. i am pleased that my good friend and colleague, doc hastings, charm of the natural resources committee, was on the floor here today to manage this bill and the gentleman from the
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northern mariana islands. i appreciate their comments and their leadership on this, along with mr. bishop and mr. grijalva. the quileutes are one of eight tribes living in the washington state district that i represent here in congress. although the tribe's reservation at la push is spectacularly beautiful, it's also a dangerous place to live. the threat of tsunamis is a harsh realities that the quileute tribe lives every day. they live on a one square mile reservation along the pacific coast of the olympic peninsula and, again, i cannot emphasize enough the breathtaking nature of their home. the tribe has received much notice over the last few years due to the "twilight" series of movies and novels. if you're not familiar with the "twilight" phenomenon yourself than i am sure your children or grandchildren know about the quileutes and their role in the
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"twilight" world. h.r. 1162 will provide land currently in olympic national park to the quileute tribe to enable the relocation of many facilities outside the tsunami zone. we need only look to the tragedy last year in japan to see the loss of human life and horrific damage that tsunamis can cause. much of the quileutes' infrastructure, including a daycare center, the elder center, government offices and quileute tribal member homes are right in the path of a potential tsunami. this exowe tension threat is compounded by damaging floods from the quillayute river every year. it has helped the quileute people to safer land. the olympic national park would transfer land that is out of the tsunami zone to the tribe for the document of new infrastructure. of the 275 acres the park service would provide the tribe for this set

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